In the USA, the dynamics of private investment in the first half of the year visibly lagged behind the previous year. This is not all that surprising, since the reduction in corporate tax in 2018 had created a special boom in investment activity. Investment in machinery and equipment therefore showed the strongest increase since 2012. What will happen next and where will the money go?
Investments in software and R&D have also increased at an above-average rate in the current margin, as the data for Q1 and Q2 show. The situation is very similar with investments in IT equipment and computers. There are no discernible slowing effects from the intensified trade conflict. But we also suspect that the international dispute will have a supporting effect on all investments, which will ultimately have a cost-cutting effect on companies. This concerns the further automation of production processes for goods as well as for services. With regard to the future orientation of the US economy, the slight acceleration in research spending is also quite optimistic. The trade conflict should also play a role here, as companies want to reduce their dependence on supplies from China.
All in all, this is a positive development that should strengthen the future viability of the US economy. This is undoubtedly also attributable to the US government’s partly very aggressive actions under US President Trump. So it should come as no surprise if this type of policy finds imitators. The global political environment could therefore move further away from a cooperative policy style.