July 27, 2018

Nonresidential investment grew at a healthy 7.3 percent annual rate in the second quarter. This brought the investment share of GDP to 13.6 percent, although it is still below the prior peak in the recovery of 13.7 percent in 2014, and far below the levels hit in the 1990s boom or at the end of the 1970s and into the 1980s. The largest contributor to this growth was structure investment, which rose at a 13.3 percent rate after rising at a 13.9 percent rate in the first quarter. By contrast, equipment investment rose at just a 3.9 percent rate. Given the shorter lead time in getting equipment investment in place, this would be the more plausible place to look for an impact from the tax cut. For more, check out the latest GDP Byte.