Most Profitable Industries in the US in 2023

1. Commercial Banking in the US

Total Profit for 2023: $462.5B

The Commercial Banking industry is composed of banks regulated by the Office of the Comptroller of the Currency, the Federal Reserve Board of Governors (Fed) and the Federal Deposit Insurance Corporation (FDIC). Banks generate most of their revenue through loans they originate to customers and businesses. Loans are made at various interest rates that are influenced by different factors, including the federal funds rate (FFR), the prime rate, debtors' creditworthiness and macroeconomic performance.

The industry experienced mixed performance. Industry operators benefited between 2017 and 2019 due to interest rate hikes by the Fed and increasing economic activity. In 2020, the COVID-19... Learn More

2. Life Insurance & Annuities in the US

Total Profit for 2023: $242.2B

According to the Federal Reserve and the American Council of Life Insurers, the Life Insurance and Annuities industry is one of the largest sources of investment capital in the United States. Holding 20.0% of all US corporate bonds, industry operators represent domestic businesses' largest source of bond financing. Many companies rely on life insurers for capital and liquidity. The primary obligation of life insurers is to their policyholders; consumers use life insurance policies and annuities products for wealth preservation, estate planning and retirement savings. Industry operators provide these services to both individuals and businesses in various policy types.

In the past... Learn More

3. Private Equity, Hedge Funds & Investment Vehicles in the US

Total Profit for 2023: $149.1B

The industry consists of funds that raise capital to invest in various asset classes. Industry assets have become increasingly integral to institutional investors' portfolios and the larger asset-management market in recent years. Institutional investors are individuals or organizations that trade securities in such substantial volumes that they qualify for lower commissions and fewer protective regulations, since it's assumed that they're knowledgeable enough to protect themselves. Increasing demand from institutional investors has contributed to the surge in the industry's assets under management (AUM) and revenue during the current period.

In recent years, the industry has continued to enmesh itself more deeply within... Learn More

4. Oil Drilling & Gas Extraction in the US

Total Profit for 2023: $137.1B

The Oil Drilling and Gas Extraction Industry includes companies that profit from extracting and selling fossil fuels. Producers have experienced a high degree of volatility in recent years. Steady growth was ripped away when COVID-19 halted the economy, as restrictions limited the need for oil and gas. The conflict in Ukraine added to the uncertainty, as the reliance on Russian oil and gas was distributed between domestic producers and other sources. Although, as the economy recovered demand shot up quicker than supply could match, causing prices to surge and generate substantial returns. Revenue has grown at a CAGR of 10.6%... Learn More

5. Property, Casualty and Direct Insurance in the US

Total Profit for 2023: $110.0B

General insurers can provide industry services at a fraction of the potential loss by pooling premiums to pay for losses some policyholders incur. The industry is an indispensable part of risk management in the domestic economy. General insurers derive income from insurance premiums and investing in bonds, stocks and other assets. Most property and casualty premiums are obtained through renewing policies relating to existing risks. Changes in risk exposure and pricing conditions affect remaining premiums. A large portion of consumers view policies as inelastic, although some may choose to decrease consumption of insurance policies should premium prices increase too much.... Learn More

6. Health & Medical Insurance in the US

Total Profit for 2023: $103.4B

The Health and Medical Insurance industry, which is made up of carriers of private and public health, medical and dental insurance, has grown. This growth is a result of consistent increases in healthcare expenditure and medical cost inflation, in addition to a decline in the uninsured rate. Industry revenue is correlated with total health expenditure, as operators increase premiums to maintain profitability. Due to the COVID-19 pandemic, the industry experienced an influx of enrollment through expanded Medicaid eligibility, in addition to lower operating costs due to lower healthcare utilization. As unemployment increased, many people lost their employer-sponsored health insurance, causing... Learn More

7. Law Firms in the US

Total Profit for 2023: $85.3B

Operators in the Law Firms industry range from sole practitioners to large, full-service legal firms mostly serving corporate clients. Industry revenue growth has been modest over the past five years. The industry benefited from economic growth through most of the period but was negatively affected by the coronavirus. Overall, industry revenue increased at a CAGR of 1.6% to $397.1 billion over the past five years, including an increase of 0.7% in 2023 alone.

Greater demand for practices tied to high-growth sectors has boosted industry revenue over the past five years. Revenue growth has been caused by demand for litigation, intellectual property... Learn More

8. Hotels & Motels in the US

Total Profit for 2023: $80.6B

The Hotels and Motels industry offers short-term lodging in hotels, motels and resorts. The need for hotels and motels relies heavily on domestic and international tourism levels, making them dependent on the overall economic environment. Travel trends were impacted by the 2020 pandemic, as travel restrictions limited tourism in the United States, causing hotels and motels to be one of the hardest hit industries by the pandemic. Since 2020, travel spending, corporate profit and general consumer spending soared, causing a rise in domestic and international tourism. Industry-wide revenue grew at a CAGR of 7.7% to $341.7 billion over the past... Learn More

9. Electric Power Transmission in the US

Total Profit for 2023: $56.0B

The Electric Power Transmission industry transmits and distributes electricity from power generators to distribution centers, other electric utilities and consumers. The increased infrastructure investment has allowed companies to raise rates, increasing revenue and profit. During the pandemic, power consumption was sluggish since many commercial and industrial businesses were forced to close. Residential consumers used more electricity because of stay-at-home orders, cushioning the blow from the decline in other sectors. The following year, an economic recovery led to a rebound in those markets as businesses reopened. Overall, industry revenue is set to increase at an annualized rate of 0.6% to $505.0... Learn More

10. Colleges & Universities in the US

Total Profit for 2023: $51.2B

As job markets have weakened and employment prospects have worsened, more high school graduates have to forgo joining the workforce and opted for postsecondary education. However, this trend reversed as COVID-19 struck. Nonetheless, the shift to fully remote learning amid the pandemic somewhat hindered demand for colleges and universities, especially among private universities. This caused enrollment at private nonprofit universities to decline in 2020 and this trend continued into Spring 2022. Overall, revenue for the Colleges and Universities industry has fallen an annualized 1.3% to $582.6 billion over the five years to 2023, including a 1.1% increase in 2023 alone.

According... Learn More