Payangadi is essentially an agrarian village with agriculture forming the backbone of economic activity. However, steps are being taken to improve the industrial infrastructure and to open up Payangadi as an exciting tourist destination.

A vast majority of the population of the village are dependent directly or indirectly on agriculture for their livelihood.  The main crops grown in the village are paddy and coconut.

Paddy occupies the largest area among annual crops. The first crop of paddy is mostly wet land crop (monsoon crop) and it covers twice the area under the second crop and the four times the area under the summer crop.

ayangadi village has a very important place in the fisheries map of Kerala. It has an 22 km. coastline from Madayi to Azhikkode

Several rivers like payangadi puzha and Chemballikundu and their tributaries, swamps irrigation tanks, paddy fields and household tanks offer vast potential for fisheries development in the inland sector. The inshore waters of the village have immense potential for fishing especially for the commercially important varieties such as a oil sardines (mathichala), mackerel ( ayila), prawns (chemmmen) and silver bellies (mullan). Formerly the indigenous methods which were in vogue employed only big medium and small size country crafts, nets and lines for fishing.

 
Payangadi village has had its industrial importance from very early days. Being blessed with variety of factors such as good soil, salubrious climate,  enormous fishing potentials, minerals as well as infrastructural facilities like road, rail, inland water trasport etc. . The village has more than 5 industries, for plywood manufacturing.

China clay is found in abundance in Madayi Para. The resources are not fully utilised in the village. The village is endowed with rich deposits of clay of which various types are mined at many places for potteries, tiles and ceramic industries.