Business is investing less and less in machinery and software.
The growth in non-defense orders (excluding aircraft) has declined to levels that in the past coincided with very slow economic growth or recession (see above chart; click on graph to enlarge). Good news for bonds.
An increasing number of data point to slow growth ahead. Food for thought.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio on http://www.peterdag.com/
Since 1977
2 comments:
Why are you puzzled? The data is what the data is. Have economic cycles been repealed? Have credit cycles? Does "liquidity" cure all ills as you seem to suggest? Time to examine some biases.
Could be several reasons why New Orders are low in the U.S. Companies sitting on tons of cash pondering future interest rates, best usage of capital. Restructuring of business plans globally and movement of production equipment and capital to overseas, etc. It would be interesting to know if the cumulative global picture showed a slowdown as much as the U.S. As long as global liquidity remains high, and interest rates low, IMHO the US economy will hang in there. Jim
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