intermediate good

{{Short description|Goods used to create other goods}}

File:B 6b.jpg is an example of an intermediate good, and is used in the production of the final good, the assembled automobile.]]

Intermediate goods, producer goods or semi-finished products are goods, such as partly finished goods, used as inputs in the production of other goods including final goods.{{cite book

| last1 = O'Sullivan

| first1 = Arthur

| author-link = Arthur O'Sullivan (economist)

| first2 = Steven M. |last2 = Sheffrin

| title = Economics: Principles in Action

| url = https://archive.org/details/economicsprincip00osul

| url-access = limited

| publisher = Pearson Prentice Hall

| year = 2003

| location = Upper Saddle River, New Jersey 07458

| pages = [https://archive.org/details/economicsprincip00osul/page/n317 301]

| isbn = 0-13-063085-3}} 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.{{cite book|author=C. Colburn Hardy|title=The Investor's Guide to Technical Analysis|url=https://books.google.com/books?id=9WvXQIwHC48C&pg=PA439|access-date=14 August 2017|date=1 January 1978|publisher=Tata McGraw-Hill Education|isbn=978-0-07-026365-9|pages=439–}}

This means intermediate goods are resold among industries.

Intermediate goods are not counted in a country's GDP, as that would mean double counting, because the value of the intermediate good is included in the value of the final good.{{cite book|author=Irvin Tucker|title=Survey of Economics|url=https://books.google.com/books?id=gY0nphIDDugC&pg=PA219|access-date=14 August 2017|date=25 February 2008|publisher=Cengage Learning|isbn=978-0-324-57961-1|pages=219–}}

File:Figure 3- U.S. and Chinese Trade in Goods with ASEAN Countries by Use, 2014 (21438915796).jpg

The value-added method can be used to calculate the amount of intermediate goods incorporated into GDP. This approach counts every phase of processing included in production of final goods.

Characterization of intermediate goods as physical goods can be misleading, since, in advanced economies, about half of the value of intermediate inputs consist of services.{{cite book|author=Chandana Ghosh|title=Macroeconomics|url=https://books.google.com/books?id=5mvKKTq-OekC&pg=PA27|access-date=14 August 2017|year=2011|publisher=PHI Learning Pvt. Ltd.|isbn=978-81-203-4306-1|pages=27–}}

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.