david rosenberg

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Many economists forecasting on accelerating U.S. GDP development are counting on hope that company financial investment will pick up in 2014.

They’ve actually said that aging devices and a general pent-up need for these capital goods represent a bullish economic force to come.

But this has actually been an argument for many years. Some strategists think it’s not coming. Others advise ‘keeping the faith.’

Gluskin Sheff’s David Rosenberg is among the economists who still think the capital expense boom is coming. He offered a chart and some commentary in his newest Morning meal With Dave note:


The response lies in CAPU … simply puts, capacity utilization rates. While hardly yet at a peak, at 77 % for U.S. production they’re at degrees that in the past touched off a moderate capex growth cycle. As the chart below programs, there’s a small lag however a suitable 65 % historical relationship. History likewise reveals that as soon as 77 % is breached in terms of CAPU rates in an up-cycle, capital spending in actual terms in the taking place years averages out to be 0 % development – enough to add an increment 60 basis indicate headline GDP trends.

Here’s Rosenberg’s chart:

rosenberg capex capu

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