Much of the focus on economic growth over the last 18 months has quite rightly been on consumers, given both their share of the economy and the simple fact that they have been most directly impacted by the current pandemic. This was not the case following the dot-com crash of 2000, nor to some degree following the GFC, when much of the focus was on the health of the global banking system. However, with the spotlight on the consumer, there has been a little less focus on business investment, which is also likely to be a very significant driver of growth in the coming years.
In this Economics Weekly, we cast an eye in the direction of business investment, with the view that the outlook here is particularly bright, and there are a number of reasons we should expect a strong pickup in capex in the coming years.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.