1. GENERAL ASSESSMENT OF THE MACROECONOMIC SITUATION
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has been only a modest improvement in the enabling conditions for private investment in many countries Figure 1.9, Panel B.
Upgrading an ageing capital stock would not only contribute to the cyclical upturn, but would also help to boost total factor productivity and potential output, given the likely
improvement in capital quality as a result of the diffusion of state-of-the-art technologies and software embodied in new equipment. Recent signs that the global IT cycle has started
to regain momentum Figure 1.10 suggest that a key part of any capital stock upgrade Figure 1.7. Weaker supply growth is helping to narrow measured cyclical slack
in the OECD economies
1. Per cent of potential GDP. Source: OECD Economic Outlook 101 database.
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2008 2009
2010 2011
2012 2013
2014 2015
2016 2017
2018 -5
-4 -3
-2 -1
1 2
3 4
1.3 1.4
1.5 1.6
1.7 1.8
1.9 2.0
2.1 2.2
OECD output gap¹ OECD GDP growth
OECD trend GDP growth
Figure 1.8. Investment intensity is projected to improve in the OECD economies but capital stock growth is set to remain weak
1. Ratio of OECD investment growth to OECD GDP growth in period shown. Source: OECD Economic Outlook 101 database; and OECD calculations.
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2002-2007 2014
2016 2018
2013 2015
2017 0.0
0.5 1.0
1.5 2.0
Average 1987-2007 = 1.18
Business plus government Housing
A. OECD investment intensity¹
2002 2004 2006 2008 2010 2012 2014 2016 2018 -0.5
0.0 0.5
1.0 1.5
2.0 2.5
3.0 y-o-y changes
OECD United States
Euro area Japan
B. Growth of the productive capital stock
1. GENERAL ASSESSMENT OF THE MACROECONOMIC SITUATION
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could be the replacement of old equipment with new digital technologies.
1
More broadly, there is a substantial scope for firms in all countries and sectors to catch up with the
technological frontier EIB, 2017. Figure 1.9. Surveys suggest that firms are likely to replace rather than expand capacity
Percentage of respondents
1. Responses to the categories Replacing existing buildings, machinery, equipment and IT, Capacity expansion for existing products services, and ‘Developing or introducing new products, processes or services’.
2. Responses to the questions How have the enabling conditions for private investment in your country changed in the past year? and In the coming year, how do you expect the enabling conditions for private investment in your country to change?.
Source: EIB Group Survey on Investment and Investment Finance, 2017; and BIAC Business Climate Survey 2017. 1 2
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Figure 1.10. The global IT cycle points to a possible upturn in high-tech investment
Year-on-year percentage changes of the 3-month moving average
Note: World semi-conductor billings in nominal US dollars. Computer and electronics output is a weighted average of production of computer and electronic products United States, output of computer, electronic and optical products Germany, and production of
information and communications electronics equipment plus electronic parts and devices Japan. Source: World Semi-Conductor Statistics; Eurostat; Board of Governors of the Federal Reserve System; Ministry of Economy, Trade and
Industry, Japan; and OECD calculations.
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10 20
30 40
50 60
70
Replacement Capacity expansion
New productsservices No investment planned
A. Investment priorities of EU companies in the next 3 years¹
