Various pundits have argued that capital spending could drive the economic recovery. While a Capex revival is underway, there is little historical support for a capex-driven recovery. With private consumer spending more than 70% of GDP, the pace of recovery hinges crucially on consumers.Click on chart to enlarge, courtesy of BCA Research.
Monday, June 07, 2010
Little Historical Support For Capex-Driven US Recovery?
Similar to guys at Goldman Sachs, the economists at BCA Research are also sceptical (excerpt from their BCA Premium Service in May 2010):