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. Trusts & Estates in the US

Total Profit for 2020: $127.0B

The Trusts and Estates industry is composed of trusts, estates and agency accounts administered on behalf of beneficiaries under the terms established in a fiduciary contract. Industry revenue, composed primarily of capital gains on trusted assets and ordinary dividends, exhibited substantial growth over the five years to 2020. The industry benefited from substantial yields in equity and fixed income markets in addition to appreciation in house prices. Overall, revenue is expected to rise at an annualized rate of 3.9% to $193.9 billion over the five years to 2020. Revenue is expected to decline 1.0% in 2020, however, due to the... Learn More

3. Commercial Leasing in the US

Total Profit for 2020: $104.0B

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

4. 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

5. 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

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. Real Estate Investment Trusts in the US

Total Profit for 2020: $73.1B

Real estate investment trusts (REITs) are companies that invest in both commercial and residential income-generating real estate and distribute at least 90.0% of their taxable income to shareholders. Over the five years to 2020, the Real Estate Investment Trusts industry has expanded as a result of rising property values and increasing investment by institutional investors. Moreover, low interest rates and rising demand for housing have spurred growth in real estate values during the current period. In light of a burgeoning property market and historically low interest rates, investors ranging from hedge funds to university endowments have invested in REITs due... 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. Real Estate Loans & Collateralized Debt in the US

Total Profit for 2020: $60.8B

The Real Estate Loans and Collateralized Debt industry is composed of nondepository institutions that conduct primary and secondary market lending. Operators in this industry include government agencies, such as the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, in addition to non-agency issuers of mortgage-related securities. During much of the five years to 2020, increased secondary market sales of collateralized debt have revived the industry, following years of subdued trading that stemmed from the subprime mortgage crisis of the late 2000s. Furthermore, the expansion of commercial banks resulted in increased primary market lending, particularly mortgages. However, uncertainty... Learn More