- The three-month annualised growth rates of business equipment production and underlying capital goods shipments remained in negative territory in April, but we expect to see improvement over the second quarter (1).
- The slump in active drilling rigs suggests that mining investment will be a drag on second-quarter business investment. That said, with oil prices rebounding, drilling rigs and mining investment should partly recover in the second half of this year (2).
- The upward trend in new home sales and housing starts suggests that residential investment will provide a modest boost to GDP growth (3).
- Business investment has also been boosted by the recent strength of spending on intellectual property, which is much stronger than we would have expected given the economy’s growth rate (4).
- While the business inventory-to-sales ratio has risen markedly (5).
- Most of the increase is linked to the decline in the value of energy sales and inventories. Excluding petroleum, the ratio has barely risen at all (6).
The material has been provided by InstaForex Company – www.instaforex.com