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Strong Equipment Sales Provide Signs of a Recovery

January 05, 2012, 07:30 AM
Filed Under: Economy

According to a Bloomberg report, companies have been spending money on equipment and software as well as everything from tools and tractors to word-processing programs.

As reported, in Q3 2011, private-sector investment in equipment and software accounted for more than 60% of total growth in GDP. Since the official end of the recession in the spring of 2009, the share of GDP devoted to such investment has risen more rapidly than in any recovery in the post-World War II era.
The boom is occurring only in equipment and software. Investment in nonresidential structures dropped in the downturn and has not come back as strongly which is the reason why, even with the boom in equipment and software, total private, fixed nonresidential investment has remained below its pre-recession peak according to Bloomberg.
The article also says that within equipment and software investment, all categories have risen rapidly. Additionally the report states that transportation equipment has more than doubled in inflation-adjusted terms from the peak of the recession in the second quarter of 2009 to the third quarter of 2011. Information-processing equipment and software, along with industrial equipment, are up more than 20%. Overall, equipment and software investment has risen more than 30%, after adjusting for inflation.

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