What Are Examples of Capital Goods?
Some examples of capital goods, which are assets used to produce consumer goods and services, are machine tools, buildings, computers, baggage-handling systems, oil rigs and battleships. In the United States, the capital-goods sector is represented by companies such as Boeing, Caterpillar and Lockheed-Martin. Capital goods, such as conveyor belts, are used to produce consumer goods, such as candy bars.
Resources can be invested in capital goods, which are believed to be the foundation for economic growth, or in consumer goods. Satisfying consumer demands is seen as the ultimate economic and societal goal. Capital goods can be depleted over time and not replaced. Orders for capital goods are believed to be a key economic indicator and the value of capital goods is a measure of a nation’s productive capacity. There is competition between investments in capital goods and consumer goods. Investing resources in capital goods is considered to favor long-term economic growth over short-term consumer demands. Some items, such as a dump truck used for construction, can be both a capital good and a consumer good. The truck represents a consumer good to the company that buys it and a capital good to be employed in building consumer goods such as new homes.