Maybe Productivity Will Save Investors From Inflation

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Companies are investing again, and typically higher capital spending translates into a lift in productivity—just what is needed when inflation threatens

and rising bond yields. Add in soaring energy prices and pending Christmas shortages and it sometimes feels like everything’s awful. But there is a bull case to be made that two decades of depressed productivity are about to come to an end.

The basic case is that companies are investing again, and that higher capital spending quickly translates into a lift in productivity. The headwinds that held back spending in the last two cycles—caution following the aftermath of the dot-com excess and a lack of credit after the 2008 financial crisis—have gone.

 

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IlvesToomas and it will mean that your region had better be ready for capital investment (with the right skill sets etc) otherwise the capital will flow elsewhere.

Investing in domestic manufacturing, robust instead of bare minimum inventories, and adding redundancy to just-in-time-logistics? Or just buying more robots to triage the last-mile fiascos?

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