Headlines You Didn’t Read Today, Good News Edition
All the news about the GDP figures is bad, the recession worse than expected, etc etc; but every blogger must try to be contrarian. After all, “if it’s not bad, it’s not news.” (Sumner, naturally).
There is some decent news in the capital spending figures. Here’s a stats review, looking at the “volume” measure of gross fixed capital formation; giving the short term view of the rate (“slightly less bad”), and the medium term view of the level (“still really bad”) for balance.
- Business Investment hit a three year high, rising 14.8% since 2011 Q1. Business investment today drives productivity tomorrow, so this is great. But business investment is still 15% below its 2007 Q1 peak.
- Housebuilding also hit a three year high, rising 4.7% since 2011 Q1. Housebuilding is 26% below the 2008 Q1 peak.
- Total gross capital formation is basically flat, rising just 1.9% on the year; but this is despite a 32% crash in government investment. Total gross capital spending remains 18% below the 2007 Q4 peak.
The following graph shows the development of capital spending by sector, relative to 2007 Q4. (This is not an ideal way to present the data since it does not show the relative size of each sector.)
Note: In this post have I not used the cursed phrase “green shoots“, nor wish to imply such shoots exist. UK aggregate demand is stuck in a hole which we badly need to recover from. But I am sure there are several European countries which would die for stats this mediocre.