What Are Durable Goods?
Durable goods or hard goods are products which are intended to hold up through extended use, rather than being rapidly consumed. A classic example of a durable good is an appliance like an oven. The opposite of durable goods is nondurable goods; a roast which might be cooked in that oven would be an example of a nondurable good. Most governments track the sales of durable goods as an economic indicator, because strong sales indicate economic health.
As a general rule, durable goods can last at least three years without the need for replacement. They may require repair or servicing, although ideally they are designed to hold up with minimal risk of breakage during their early years of service. Durable goods can also last much longer than three years, of course, with three years of regular use being the minimum performance standard. A durable good like a car may function for 20 years or more with appropriate care.
These are long term purchases, and some durable goods can be very costly. There are generally long intervals between purchases of durable goods because people don't need to replace them on a regular basis. By contrast, with nondurable goods, also known as soft goods or consumables, people must consistently replace because the goods are designed to be rapidly consumed. Products like personal care products, food, paper, and textiles are nondurable goods.
Durable consumer goods are manufactured by a number of companies which aim to produce products which deliver utility and service over time. They usually come with warranties which are designed to act as guarantees for consumers. Many companies also work hard to build up a reputation since they want consumers to think of them on the rare occasions when new hard goods need to be purchased. These companies cultivate brand loyalty among consumers for the purpose of keeping sales steady.
Durable goods data is usually readily available from government agencies which track the sale and movement of goods and services. It is also usually included in economic reports in the news because it can be a valuable indicator. When sales of durable goods drop, it indicates that people have less money to spend, and that people may be focusing on repairing and servicing their hard goods rather than replacing them. When sales rise, there is more liquidity and consumers can more readily purchase new durable goods. Increase in demand for these products also increases demand for raw goods, which can have a ripple effect on the economy.
Written by S.E. Smith
