Capital Markets: Observations & Insights

Higher Investment to Lead to Higher Productivity ​ Productivity Pick-Up

• A surge in business spending on assets (e.g., plants, property, equipment, IT, etc.) should drive higher productivity

Business Assets

Productivity

5%

4%

3%

2%

Forecasted

1%

(3 Year Average)

Year-over-Year Change

0%

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Source: FactSet, Bureau of Economic Analysis and Alger estimates. Business assets is U.S. real private nonresidential capital stock, which is advanced two years. Productivity is U.S. output per labor hour. Estimates are based on regression with real private capital stock.

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