Manufacturing Investment as a Percent of the Value of Shipments, 1997-2006
The Graph of the Week ismanufacturing investment as a percent of the value of shipments. It comes from the article "The Puzzle of Manufacturing Sector Investment" by Donald Norman in the April 2008 issue of Business Economics. From the article:
A number of benchmarks document a relatively tepid pace of investment in the manufacturing sector as it emerged from its sharp downturn that began in mid-2000. Manufacturing investment as a percent of the value of manufacturing shipments (both measured in current dollars) has declined since 1995. In 2002, the ratio fell below its average over the period from 1977 through 2006 (Figure 1). Moreover, the ratio of investment to the value of shipments is well outside the range defined by one standard deviation. The trend in this ratio since 2002 also contrasts with earlier periods (e.g., 1983-1985) in which the manufacturing sector rebounded from a downturn in economic activity.
NABE members can read the full article here. The abstract is available to the public.