Phek's economy is predominantly agrarian, supported by terrace rice cultivation and the traditional *jhum* (shifting) cultivation. The town itself serves as the commercial hub for the district.
Major economic activities and business structures include: * **Local Markets:** The main town bazaar features local vendors selling fresh organic produce, meats, and daily essentials. * **Handlooms & Handicrafts:** Small-scale enterprises and cooperatives focus on traditional Naga weaving, wood carving, and cane/bamboo work. * **Government Employment:** State government departments and administrative offices form the largest employment sector in the town. * **Retail & MSMEs:** The business district consists mostly of family-owned retail shops, hardware stores, and small service providers.