Agriculture and fishing are the primary sources of income for residents of the region. The soil and topography allow for a diverse selection of crops: Rubber, pepper, cashew and ginger are the important crops that are grown in the eastern part of the region, which comprises forests and hilly areas. In the coastal areas are grown: coconut, rice and tobacco.

Since the oil boom of the ’80s, young people have migrated to the oil-producing Gulf countries in pursuit of lucrative job opportunities. This has considerably changed the economic situation and lifestyle of the residents. Many families depend on money sent home by family members working in the Gulf and other regions. Kanhangad had a larger diaspora in the Gulf countries. The remittance from these countries supported the economic activities a lot. (See Kerala Gulf diaspora).The laterite (Cheadi) and red soil which is found in the Kanhangad and the surrounding areas are excavated and processed for export. The best quality cashews in Kerala are cultivated in Kanhangad. This industry has been able to secure a lot of foreign exchange by exporting it. One of the largest public sector enterprise in Kanhangad is the China Clay Factory in Vazhunnoradi. Now the government has plans to start a Cashew liquor factory and the first ever meat processing plant and college in India here. An automobile repairing factory is also in consideration to be set up at the Guruvanam industrial park.