NewsHK
UBS reports that capital spending outside the technology sector has effectively been in recession for at least two years.
The bank notes that private non-residential fixed investment has averaged 0.1% year-over-year over the last eight quarters, a figure significantly below the 3.2% long-run average.
Residential investment has fared worse, averaging -2.0% year-over-year compared to a 2.2% long-run average over the same period. In contrast, AI-related investment has grown 26% year-over-year during this timeframe.
UBS argues that because broader investment is already weak, additional rate hikes may have limited ability to suppress further spending.
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