Most Profitable Industries in the US in 2020

1. Commercial Banking in the US

Total Profit for 2020: $165.6B

The Commercial Banking industry is composed of banks regulated by the Office of the Comptroller of the Currency, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC). Banks generate the majority of their revenue by accepting customer deposits and then lending these deposits out to individuals and businesses at a certain interest rate, which is influenced by different factors, including the federal funds rate, the prime rate and the debtor's creditworthiness.

Industry revenue finally returned to growth in 2015 after declining in each year since 2008. The Federal Reserve's gradual process of interest rate normalization between 2015 and 2018... Learn More

2. Life Insurance & Annuities in the US

Total Profit for 2020: $99.0B

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 are the largest source of bond financing for domestic businesses. As a result, many companies rely on life insurers to expand operations or finance transactions. However, 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... Learn More

3. Portfolio Management in the US

Total Profit for 2020: $89.0B

The Portfolio Management industry has experienced countervailing trends over the five years to 2020. Industry operators manage asset portfolios for a fee or commission. For the majority of the period, rising assets under management (AUM) as a result of rising asset prices and growing disposable income has increased the base of assets industry operators charge fees on. However, increased investor preference for passive asset management, including through exchange-traded funds (ETFs), has driven expenses charged for the management of assets down during the period.

Financial markets play an integral role in AUM growth and, consequently, base and performance fees earned by managers.... Learn More

4. Health & Medical Insurance in the US

Total Profit for 2020: $84.5B

The Health and Medical Insurance industry, which is made up of carriers of private, group and public health, medical and dental insurance, is characterized by growth over the five years to 2020. This growth is a result of consistent increases in healthcare expenditure and medical cost inflation, in addition to a sharp decline in the uninsured rate. Industry revenue is correlated with total health expenditure, as operators increase premiums to maintain profitability. Despite revenue growth, medical cost increases and new legislation mandating minimum medical loss ratios have put pressure on industry profit. As a result of these trends, revenue is... Learn More

5. Software Publishing in the US

Total Profit for 2020: $82.0B

The Software Publishing industry comprises companies that design, develop and publish software. The industry encountered growth over the five years to 2020, as businesses and consumers increased their investment in software, computers and video games. Rising private investment in computers and software stimulated demand from businesses, while rising disposable income levels encouraged consumers to spend on software as well. Moreover, new internet-based solutions and the increasing popularity of mobile devices have triggered an explosion of mobile software applications. Over the five years to 2020, industry revenue is estimated to rise at an annualized rate of 3.9% to $262.3 billion. In... Learn More

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

Total Profit for 2020: $75.5B

The Private Equity, Hedge Funds and Investment Vehicles 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. Institutional investors are individuals or organizations that trade securities in such substantial volumes that they qualify for lower commissions and fewer protective regulations since they are assumed to be 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 early portion of the period. To a lesser extent,... Learn More

7. Commercial Leasing in the US

Total Profit for 2020: $73.6B

Operators in the Commercial Leasing industry serve as lessors of buildings for nonresidential purposes. Industry participants include owner-lessors of nonresidential buildings, establishments that rent real estate and then act as lessors in subleasing it, and establishments that provide full-service office space. Over the five years to 2020, increased per capita disposable income encouraged more businesses to enter the market. Moreover, incumbent businesses are inclined to increase their production and inventory levels to tap on the growing consumer demand, thus demanding more space. However, declining corporate profit has partially dampened demand for commercial leasing, as a result of lower confidence in... Learn More

8. Regional Banks

Total Profit for 2020: $66.1B

The Regional Banks industry has benefited from increasing assets under management (AUM) over the five years to 2020 as a result of macroeconomic growth during the majority of the period. IBISWorld defines the Regional Banks industry as commercial banks that have between $50.0 billion and $500.0 billion in domestic AUM and operations that are not limited to one state. Banks that fall into this threshold provide the same services that the commercial banking industry provides. However, regional banks have a substantially smaller scope of operations compared with large commercial banks that operate across the country.

Over the five years to 2020,... Learn More

9. Law Firms in the US

Total Profit for 2020: $65.0B

Operators in the Law Firms industry range from sole practitioners to full-service legal firms mostly serving corporate clients. Industry revenue growth has been modest over the five years to 2020, as businesses have expanded and disposable income has increased during most of the period. As the economy improved, the industry has benefited from increased corporate activity. An increasing number of mergers and acquisitions (M&As), coupled with the rising strength in initial public offerings (IPOs) in 2017 and 2018, is expected to support revenue growth for the industry's top firms over the coming years. These firms receive the bulk of their... Learn More

10. Colleges & Universities in the US

Total Profit for 2020: $63.6B

The Colleges and Universities industry includes public and private nonprofit colleges and universities that offer academic courses and grant baccalaureate or graduate degrees. For most of the past five years, strengthened job markets and better employment prospects hindered industry demand, causing high school graduates to enter the workforce and forgo postsecondary education. However, this trend has reversed since the COVID-19 (coronavirus) struck, bolstering industry demand. Moreover, growth in government funding and private donations have further supported the industry revenue during the same period. Overall, industry revenue is estimated to grow at an annualized rate of 4.5% to $578.4 billion over... Learn More