Industrial Demand: Overview and Examples
Industrial demand is a measure of the amount of goods and services that are needed to satisfy the needs of a particular industry. This demand is typically driven by factors such as customer demand, economic conditions, and technological advancements. The industrial demand can be broken down into two categories: direct and indirect.
Direct Demand
Direct demand is the amount of goods and services that are required by a particular industry for its own operations. Examples include raw materials, machinery and equipment, and labor. These goods and services are used to produce the finished products that are sold to customers.
Indirect Demand
Indirect demand is the amount of goods and services that are required by a particular industry to support its operations. Examples include transportation, communication, banking, and other services. This type of demand is often referred to as “back office” demand.
Examples of Industrial Demand
- The automotive industry requires a large amount of steel, rubber, and plastics to produce cars.
- The oil and gas industry requires a large amount of machinery, equipment, and labor to extract and refine petroleum.
- The electronics industry requires a large amount of semiconductors, circuit boards, and software to produce consumer electronics.
- The agriculture industry requires a large amount of machinery, equipment, and labor to produce food and other agricultural products.
Industrial demand is an important economic indicator that can be used to gauge the health of a particular industry. It is also important to note that industrial demand is not always a predictor of economic growth. In some cases, it can be an indication of a downturn in the industry. In conclusion, industrial demand is an important measure of the amount of goods and services that are required by a particular industry. It can be broken down into direct and indirect demand, and can be used to gauge the health of an industry.
References:
- https://www.investopedia.com/terms/i/industrialdemand.asp
- https://www.investopedia.com/articles/investing/062415/what-is-industrial-demand.asp
- https://www.investopedia.com/terms/e/economicindicator.asp