Key takeaways from this publication:

  • We expect GDP growth to moderate from its rapid pace in 2021 but to remain above trend in 2022.
  • A tech-led business capital expenditure (capex) recovery is underway and separates the overall performance of business spending in this cycle compared with previous cycles
  • Conditions for further strength in capex remain in place: company bank balances remain elevated, credit conditions remain supportive, and our expectations are that the Federal Reserve (Fed) rate hike cycle will be gradual
  • The bipartisan infrastructure bill, along with the potential for additional infrastructure stimulus, should be supportive of capex for several years
  • Risks to the capex outlook include the potential for higher corporate taxes, a more-aggressive-than-expected rate hike cycle, and uncertainty around structural shifts in consumer behavior in the post-pandemic economy
  • We expect solid capex to bolster GDP growth and productivity in the year ahead, though the pace may slow after a rapid run-up in 2021

Please see important disclosures at the end of the publication.

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