Intermediate Goods – Meaning, Example and more [Economics Concept] [Commerce Achiever]

Intermediate goods are those goods that help to complete the other goods ie. as supporting goods. Intermediate goods meant for resale. Intermediate goods are used for further processing or resale. Intermediate goods used for producing the final GOODS and SERVICES.

Examples-

are steel sheets used for making automobiles and copper used for making utensils. 

These are intermediate goods, mostly used as raw materials or inputs for the production of other commodities. These are not final goods.

A firm may make and then use intermediate goods, or make and then sell, or buy then use them. In the production process, intermediate goods either become part of the final product or are changed beyond recognition in the process. This means intermediate goods are resold among industries. Intermediate goods are not counted in a country’s GDP.

Intermediate goods generally can be made and used in three different ways.-

First, a company can make and use its own intermediate goods.

Second, a company can manufacture intermediate goods and sell them to others.

Third, a company can buy intermediate goods to produce either secondary intermediate goods or final goods.

More Examples

• Sugar– sugar is used as a final good (when it is sold as sugar in the supermarket) or as an input (when it is used as an ingredient in other food products)
• Steel– a raw material used in the production of many other goods, such as bicycles.
• Car Engines – Some firms make and use their own, others buy them from other producers as an intermediate good, then use them in their own cars.
• Paint, plywood, pipe and tube, and ancillary parts.
• Wood – wood is used for multiple purposes for the construction of building or production of furniture
• Glass- Glass can be used to make dishes, cups, bottles, or windows
• Salt- salt is used in almost all food production
• Silver and Gold – Silver and gold can be used for the production of jewelry or kitchen utensils and even for food decoration or interior design.