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About:
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What Are Consumables?
Consumables are goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. They can also be defined as the components of an end product that is used up or permanently altered in the process of manufacturing such as semiconductor wafers and basic chemicals.
Stocks of companies that make consumables are considered safe harbors for equity investors when the economy shows signs of weakness. The reasoning is simple in that people always need to purchase groceries, clothes, and gas no matter what the state of the broad economy.
Many of the items measured in the basket of goods used to calculate the consumer price index (CPI) are consumables. Inflation in these items is closely watched because it can lower the discretionary income people have to spend on items such as cars, vacations, and entertainment.
Since staple goods are consumed at all times, they are considered non-cyclical, while more discretionary products are cyclical and can vary in demand with the economy.
Consumables Examples
While certain consumables like food, gasoline, clothing, and personal hygiene products are ubiquitous, the world of consumables also has some interesting niche areas and sectors. Here are just a small set of examples.
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