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Physical inputs such as materials, components or partly finished products used to make other goods rather than acquired for final consumption.
Save conceptIntermediate goods are physical inputs used to produce other goods rather than items acquired for final consumption. They can include raw materials, components and partly finished products. Their role depends on how the purchaser uses them, not just on what the product looks like.
A producer buys these inputs and combines or processes them into its output. Economic accounts distinguish their value from the value the producer adds through its own activity. Trade data can classify imports by intended use, helping distinguish supplies entering production from finished consumer goods or longer-lived production equipment.
Imagine a hypothetical bakery buying flour to make bread for sale. The flour is an intermediate input in the bakery’s production. A household buying flour to use for its own consumption has a different final use. A new commercial oven is also different: it supports repeated production over time rather than being used up as an ingredient in each batch.
Intermediate goods are a goods subset of the broader idea of intermediate inputs, which can also include purchased services and energy. They differ from such as durable machinery. An increase in the value of imported inputs can reflect higher prices, quantities or a changed mix, so value growth alone does not measure production growth.
Jamaica’s January–May goods trade gap widens as exports fall