Durables
Durables, also known as durable goods or consumer durables, are a category of consumer goods that do not wear out quickly, and therefore do not have to be purchased frequently. Durables, also known as durable goods or consumer durables, are a category of consumer goods that do not wear out quickly, and therefore do not have to be purchased frequently. Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toys, small tools, sporting goods, photographic equipment, jewelry, motor vehicles and motor vehicle parts, turbines, and semiconductors. Durables, also known as durable goods or consumer durables, are goods that do not need to be purchased very often and typically last for at least three years. Examples of consumer durable goods include appliances such as washers, dryers, refrigerators, and air conditioners; tools; computers, televisions, and other electronics; jewelry; cars and trucks; and home and office furnishings.
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What Are Durables?
Durables, also known as durable goods or consumer durables, are a category of consumer goods that do not wear out quickly, and therefore do not have to be purchased frequently. They are a part of core retail sales data and are known as "durable goods" because they tend to last for at least three years.
Understanding Durables
Durable goods derive their name from the fact that they last in value for a relatively long time. The opposite of a durable good, or a nondurable good, is milk. Milk is considered a nondurable good because it has a short shelf life and all of its economic value is consumed soon after production or purchase.
Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toys, small tools, sporting goods, photographic equipment, jewelry, motor vehicles and motor vehicle parts, turbines, and semiconductors.
An individual's wealth is preserved by spending a high proportion of their income on durable, capital, or investment goods, which are goods that retain their economic value for longer periods of time. Investors, business owners, and economists keep a close eye on expenditures and new orders for durables as a sign of sustainable economic growth.
Categories of Consumption
Expenditures on consumer goods consistently account for more than 68% of U.S. gross domestic product (GDP). Consumer goods are broken up into the broad categories of nondurable goods, durable goods, and services. Personal consumption is distinct from private domestic investment, which is expenditure on capital, including tools, factories, machinery, and residential structures, used to produce consumer goods.
In the first quarter of 2019, expenditure on durables accounted for nearly $1.5 trillion in spending. One of the main drivers of growth in this sector is transportation, such as motor vehicles and commercial jets. Transportation and defense orders are generally omitted from headline economic figures due to their greater volatility. Computers and electronic products have also been the main drivers of growth in the durables sector in recent years.
Examples of Durable Goods Companies
Some of the largest publicly traded durables producers, by market capitalization, include Kimberly-Clark Corporation, ABB Ltd., Johnson Controls, Clorox Company, Mohawk Industries, and Whirlpool Corporation.
These companies are divided into the sub-sectors of containers and packaging, electrical products, industrial specialties, specialty chemicals, home furnishings, and consumer electronics/appliances, respectively. Overall, the durable goods industry is looked to as an engine of future growth.
Related terms:
Buy
Buy is a term used to describe the purchase of an item or service that's typically paid for via an exchange of money or another asset. read more
Capital Goods
Capital goods are tangible assets that a business uses to produce consumer goods or services. Buildings, machinery, and equipment are all examples of capital goods. read more
Consumer Goods
Consumer goods are the products purchased by the average consumer. read more
Consumer Spending
Consumer spending is the amount of money spent on consumption goods in an economy. read more
Depression
An economic depression is a steep and sustained drop in economic activity featuring high unemployment and negative GDP growth. read more
Economic Value
Economic value is the worth of a good or service determined by people's preferences and the trade-offs they choose given their scarce resources. read more
Economic Growth
Economic growth is an increase in an economy's production of goods and services. read more
Factory Orders: Overview
Factory orders are economic indicators of the dollar value for durable and non-durable goods. read more
Gross Domestic Product (GDP)
Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. read more
Market Capitalization
Market capitalization is the total dollar market value of all of a company's outstanding shares. read more