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Producer goods are all those goods which are used in the process of production i.e., which are used in the production of other goods. Producers goods include two types of goods:
- Single-use Producer Goods: Goods used as raw material by the producers. It includes raw material like coal, wood etc. They are not capital goods as they cannot be repeatedly used in the production process.
- Capital Goods: Goods which are used as fixed assets by the producers, like plant and machinery, which can be repeatedly used in the production process.
So, it can be said that all capital goods are producer goods, but all producer goods are not capital goods . eg. wood used in making furniture is a producer good but it is not a capital good as the wood can be used for one furniture only. The same wood cannot be repeated for another furniture.
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