Using the Sector Model explain the rationale for the location of the industrial sector
What Is the Industrial Goods Sector?The industrial goods sector includes stocks of companies that mainly produce capital goods used in manufacturing, resource extraction, and construction. Show
Businesses in the industrial goods sector make and sell machinery, equipment, and supplies that are used to produce other goods rather than sold directly to consumers. Key Takeaways
Understanding the Industrial Goods SectorThe industrial goods sector includes companies involved with aerospace and defense, industrial machinery, tools, lumber production, construction, waste management, manufactured housing, and cement and metal fabrication. Performance in the industrial goods sector is largely driven by supply and demand for building construction in the residential, commercial, and industrial real estate segments, as well as the demand for manufactured products. When the economy contracts during recessions, activity in this sector drops because companies postpone expansion and produce fewer goods. However, with this sector covering a wide range of subsectors, there is usually at least one area of growth in the industrial goods sector. The industrial goods sector goes through life cycles that see different subsectors in growth phases. The major stages of the growth cycle are accelerating growth, decelerating growth, accelerating decline, and decelerating decline. Investors do well when they pay attention to the industry trends and progression of the growth cycle. Companies in the accelerating growth and decelerating decline phases have the best performance and are given higher multiples due to their upcoming growth. Many of the subsectors go through bullish growth cycles lasting for years before seeing a retraction. For example, the aerospace and homebuilding sectors have both gone through these cycles. Other areas, such as industrial conglomerates and waste management, have provided steady streams of revenue generation. Tracking Industrial Goods StatisticsThe Bureau of Labor Statistics (BLS) is a valuable resource for investors and analysts at the sector level. The industrial goods sector is listed as a whole and broken down by subsector in reports. The BLS provides information such as employment, union membership, growth projections, hourly wages, and fatalities/injuries. Investors can interpret these statistics to determine growth cycles. The U.S. Census Bureau publishes monthly data on new orders of capital goods, broken down into various subsectors, which can provide powerful insights into long- and short-term trends in the industrial goods sector. Large Industrial Goods CompaniesThe industrial goods sector includes some of the largest companies in the United States. General Electric, Honeywell, Union Pacific, Caterpillar, 3M, Dow Chemical, and Boeing are included. Indeed, the Dow Jones Industrial Average (DJIA) ) is a widely-watched benchmark index in the U.S. containing 30 blue-chip stocks, weighted heavily to the industrial goods sector. When the index initially launched in 1896, it included only 12 companies. Those companies were primarily in the industrial sector, including the railroads, cotton, gas, sugar, tobacco, and oil. In the early 20th century, the performance of industrial companies was typically tied to the overall growth rate in the economy. That cemented the relationship between the Dow's performance and that of the overall economy. Even today, for many investors a strong-performing Dow equals a strong economy (while a weak-performing Dow indicates a slowing economy). Ways to Invest in Industrial GoodsThe MSCI USA Industrials Index is the common benchmark for the industry. This index gained an average of 10.5% annually from 2010 to 2015. Investors can invest in individual industrial goods stocks or look to mutual funds and exchange-traded funds (ETFs). Fund offerings cover the entire industrial goods sector and some cover subsectors of the industry as well, such as aerospace. The Industrial Select Sector SPDR Fund and Vanguard Industrials ETF are two of the largest funds tracking the sector. Sector Model (also known as Hoyt Model and Hoyt Sector Model) is an urban land use model which talks about spatial arrangement of activities in an urban area. Big cities and towns have always been an area of research and have caught the attention of scholars and academicians. Homer Hoyt gave sector model which is also known as Hoyt Model, in 1939 which explains how cities grew and activities arranged themselves in the form of concentric zone. As we witness the population growth it is becoming more and more essential to understand how cities work. Studies on patterns of urban growth, spatial forms, settlement geography, and land use are of great interest to the concerned people. Various theories and land use models have been proposed which attempt to explain how the growth took place and how different groups & activities are arranged in an urban area. Different models and theories which talks about the growth of urban regions include rank-size rule, primate city & primacy, central place theory, Multiple Nuclei Model, Burgess Model. Related: Primate City & Primacy | Relationship between city sizes Urbanisation Urban growth and urban development is making cities more and more complex. Any city is home to a large number of economical activities and how these activities are located in the city is explained by land use models. There are certain factors and characteristics which define the location of industries, commercial establishments, central business districts, residential areas etc. Hoyt argued that cities do not develop in the form of simple rings, instead they have “sectors.” Homer Hoyt in 1939 suggested that few activities grow in the form of sectors which radiates out along the main travel links. Activities in a sector are considered to be the same throughout the sector because of the purpose/function it serves. Land use within each sector would remain the same because like attracts like. The high-class sector would stay high-class because it would be the most sought after area to live, so only the rich could afford to live there. The industrial sector would remain industrial as the area would have a typical advantage of a railway line or river. These sectors can be housing, industrial activities, etc. These sectors grow along railway lines, highways or rivers. Components of Hoyt ModelCBD – Central Business District is the city centre and located at the geographical center. Sectors and the partial rings of land use/activities that take place. This area is often known as downtown and has high rise buildings. Inner city area or downtown area is a complex and dynamic organism. It represents many layers of historic growth of many generations, city development and the impact of cultural & traditions of men who inhabited the city as tourists. The combinations of these layers and the way they are held together in the city gives imageability, out of its socio-cultural heritage. As the cities are expanding, modern technology and scientific innovations are transforming the style of living and also the structure of the city. Open spaces were being eaten up by built forms resulting in congested and an unhealthy environment. Industry – Industries are represented in the form of a sector radiating out from the center. These forms sector because of the presence of a transport linkage (both road and railways) along which the activities grew. Presence of railway lines, rivers or roads would attract similar activity, and thus a continuous corridor or “sector” would develop. Manufacturing units have a huge influence on how a city grow and shapes the overall geometry of any area. Land price is another factor which greatly affects the location of industries since it requires a large parcel of land. Apart from the industries this area also serves as a residential zone for lower class workers. Living conditions are bad because of proximity to industries. Urban planning tries to separate the residential and industrial land use as these are conflicting land uses. Related: Central Place Theory (CPT) by Walter Christaller (1933) Low-Class ResidentialLow-income groups reside in this area. Narrow roads, high population density, small houses with poor ventilation. Roads are narrow and often connect to the industries where most of the people in this sector work. Closeness to industries reduces the travel cost and thus attracts industrial workers. Environmental and living conditions are often inadequate because of the proximity to factories. Middle-Class ResidentialThis area has middle income groups who can afford more substantial travel costs and want better living conditions. The activities of people residing in this area consist of different activities and not just the industrial work. It has more linkages with CBD along with some linkages to industries. This area has the most significant residential area. High Class residentialThis is the outermost and farthest area from downtown. Wealthy and affluent people live in this area. This area is clean, has less traffic, quiet and has large houses. Corridor or spine extending from CBD to the edge has the best housing. The significance of Hoyt Model
Limitations of Sector Model
Features of sector model
Related: Burgess model or concentric zone model, Von Thunen’s Model of Land Use and Agriculture Tags: Sector Model, Hoyt Sector Model, Hoyt Model, Homer Hoyt, Central Business District, Industrial Zone, City Model, Land Use Model, Sector Theory, The Sector Model, Model of City Growth What is the sector model AP Human Geography?The sector model, also known as the Hoyt model, is a model of urban land use proposed in 1939 by land economist Homer Hoyt. It is a modification of the concentric zone model of city development. The benefits of the application of this model include the fact it allows for an outward progression of growth.
What is a Metacity AP Human Geography?Metacities are a large cluster of Megacities that have a population of greater than 20 million people. Metacities are connected through transportation systems and infrastructure. Metacities form one very large economic center! Source: World Atlas.
What is the pattern of unemployment across Germany?Unemployment Rate in Germany averaged 6.03 percent from 1950 until 2022, reaching an all time high of 12.10 percent in March of 2005 and a record low of 0.40 percent in March of 1966.
How might the multiple nuclei model apply in a developing country?cities in developing countries have multiple nuclei due to their colonial pasts. the wealthy tend to live closer to the inner rings in developing countries. poor people are clustered in the inner city in developing countries.
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