Producer's Durable Equipment and Structures

It sounds like the incredibly literal name for a farm equipment and barn construction company, run by a guy named something like Ralph Producer.

Instead, Producers' Durable Equipment and Structures refers to a highly specific type of business spending. It's probably best to break it down step-by-step. So, uh...that’s what we’ll do.

First: durable equipment.

Manufacturing products often get sorted into two main categories: durable and non-durable. Durable goods are those meant to last a long time. The usual definition calls for an item meant to last at least three years. So, for consumers, we're talking things like cars and washing machines and electric salad spinners.

Non-durable goods are more disposable. Think: products like paper cups and toilet paper and odor-neutralizing shoe inserts.

Second: the "producers" part. Some manufactured goods are made for regular people to buy for use in their day-to-day lives. That stuff gets the title "consumer goods." A different category applies to items made for other companies to buy for use as part of their operations: "producer goods."

A blender that can make 5 margarita servings: a consumer good. A giant, room-sized blending vat that can make 5,000 gallons of margaritas: producer good.

Producers' durable equipment is equipment meant to last a long time, and to produce on a large scale. It's not for consumers...it's for other producers. At the odor-neutralizing shoe insert factory, we're talking about the big stamping machine that cuts the foamy material into foot shapes. Or the giant sprayer that squirts anti-stink juice onto the foot-shaped foamy things.

Those are examples of producers' durable equipment.

Third: the "structures" part.

Structures have to do with buildings. Like, actual structures...places people work, or which get built as part of a factory campus. The buildings. The offices. The gazebos out by the tennis courts, where the string quartet plays. Well, that last one is more for the Googles and Apples of the world. But...it still counts. So the Producers' Durable Equipment and Structures refers to business spending on long-lasting manufacturing equipment, or on the physical buildings used by the company.

Basically, it tracks large capital expenditures by companies. It's the amount businesses spend on their big-ticket equipment, or on their physical structures. The large items in which a company has to invest in order to...do what they do. Economists track this number as a sign of the health of the manufacturing industry. If companies are willing to make these big purchases...it’s a good sign.

These purchases often require borrowing money. Companies also need confidence that they'll get years’ worth of use out of the equipment and/or structures. So the fact that the firms are making the purchases bodes well for the industry as a whole. On the other hand, if companies are reluctant to make these purchases, it’s a bad sign for the industry. It shows a lack of confidence. When the figures for Producers’ Durable Equipment and Structures go down, the economy could be in trouble.

So...the shoe insert company decides to ditch its aging anti-stink-juice sprayer and, instead, borrow money to purchase the brand new, Internet-enabled, A.I.-designed TechStink Spurt X 9000. The move shows up as part of the national statistics on Producers' Durable Equipment and Structures.

Good sign for the economy. Businesses are showing confidence in the future. Or it could just indicate that the odor-neutralizing company sees ongoing demand for its specific product. Because feet are, uh...eternally rancid.