Econ: What are Producers' Durable Equipment and Structures?

What are Producers’ Durable Equipment and Structures? Durable equipment and structures include products used that last a long time. So, in the case of many businesses durables include things like machinery and appliances.

FinanceEcon
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Transcript

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of business spending It's probably best to break it down

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step by step So yeah that's what we'll do first

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Durable equipment While manufacturing products often get sorted into two

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main categories durable and nondurable durable goods or those Mento

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last a long time right The usual definition calls for

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an item Mento last at least three years So for

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consumers were talking things like cars and washing machines and

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electric salad spinners and senators Nondurable goods arm or disposable

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Think products like paper cups and toilet paper and odor

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neutralizing shoe inserts You know stuff like that Durable equipment

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equipment meant to last at least three years So now

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the producers part Some manufactured goods are made for regular

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people to buy for use in their day to day

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lives Well that stuff gets the title Consumer goods A

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different category applies to different items made for other companies

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to buy for use as part of their operations It's

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called producer goods Yeah that's the category A blender that

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can make five margaritas servings Consumer Good A giant room

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sized blending that that can make five thousand gallons of

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margaritas Producer Good So yeah producers Durable equipment is equipment

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meant to last a very long time and to produce

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on a large scale It's not for consumers It's for

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other producers at the Oder Neutralizing Shoe Insert factory while

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we're talking about the big stamping machine that cuts the

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phony material into you know foot shapes or the giant

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sprayer that sports anti stink anti stink Jews technically onto

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the foot shaped foamy things those are examples of producers

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Durable equipment Now the structures Sparta will structures have to

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do with buildings shockingly like actual structures places people work

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or which get built as part of a factory campus

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right the buildings the offices the gazebos out by the

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tennis courts where the string quartet plays well That last

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one is more for the Googles and Facebook's of the

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world But well it still counts So the producers durable

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equipment and structures refers to business spending on long lasting

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manufacturing equipment or on the physical buildings used by the

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company well basically attracts large capital expenditures by Cos It's

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the amount businesses spend on their big ticket equipment or

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on their physical structures The large items in which a

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company has to invest in order to you know do

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what they do While Economist track this number is a

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sign of the health of the manufacturing industry If companies

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are willing to make these big purchases it's generally a

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good sign of what's to come with the economy right

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Thes purchases often require borrowing Money Cos also need confidence

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that they'll get a year's worth of use out of

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the equipment and or structures and that they're optimistic about

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their futures So the fact that the firms are making

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the purchases bodes well for the industry as a whole

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and usually where the industry goes so the economy goes

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right On the other hand if companies are reluctant to

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make these purchases it's a bad sign for the industry

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and or the economy It shows a lack of confidence

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when the figures for producers durable equipment instructors go down

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while the economy likely is going to be in trouble

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In the future So the shoe insert company decides to

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ditch its aging anti stink juice sprayer and instead borrow

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money to purchase the brand new Internet enabled A I

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designed texting spurt X nine thousand The move shows up

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as part of the national statistics on producers durable equipment

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and Structures Yeah good thing Good sign for the economy

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Businesses are showing confidence than in the future Or it

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could just indicate that the odor neutralizing company sees ongoing

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demand for its specific product Because feet are well you

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know eternally on Iran's in there you just spray it 00:03:59.32 --> [endTime] Oh yeah