Industry as a whole supplied 32% of Honduras's GDP in 2000, and employed 21% of the work force. Manufacturing has traditionally been limited to small-scale light industry supplying domestic requirements.
Assembly plant operations developed in the 1970s, especially after a free-trade zone was established in Puerto Cortes in 1975. San Pedro Sula is the center for matches, cigars, cigarettes, cement, meatpacking, sugar, beer and soft drinks, fats and oils, processed foods, shoes and candles. Tegucigalpa has plants for the manufacture of plastics, furniture, candles, cotton textiles, and leather. The country has also established a well-known apparel assembly industry in the maquiladora sector, which employed over 125,000 workers in 2001. As of 2002, Honduras was the second largest exporter of maquiladora items to the US market.
Production in the manufacturing industry, mainly of nondurable goods, has realized significant growth in the late 1990s and into the 2000s. The largest growth has been seen in the construction sector, which rebounded after the destruction wrought by Hurricane Mitch in 1998. The electric, gas and water sectors gained almost 9%. However, in 1999 a fire temporarily closed the Cajon hydroelectric plant that had supplied 40% of the country's electricity. The electronic distribution system was privatized in 2000.