Capital goods or production goods are the equipment, facilities, goods or services necessary for the production of other goods or services. The capital good is not directly incorporated into the final product. Individuals, organizations and governments use capital goods in the production of other goods or commodities.
Capital goods include factories, machines, tools, equipment, and various buildings that are used to produce other consumer products. There are controversies in the use of the word. For example, cars are considered consumer goods as they are generally purchased for personal use, but a truck can be considered a capital good, as it is used by construction companies to transport materials, to build houses and buildings.
Technology uses a combination of factors to produce goods and services. Agriculture and industry can be capital intensive and labor intensive, using more labor or labor. Factors of production are formed by land or natural resources, labor, capital, technology and entrepreneurial capacity.
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