Business Investment
Business investment measures spending by companies on capital goods such as equipment, infrastructure, and technology.
Meaning in Practice
Business investment includes expenditures on machinery, buildings, research, and software. It reflects corporate confidence in future demand and profitability. The data is typically reported as part of GDP components.
Why It Matters
Rising business investment supports productivity growth and long-term economic expansion. Weak investment may signal uncertainty or tightening financial conditions. Policymakers monitor it to assess economic momentum.
Market Impact
Strong investment data can boost equities and increase bond yields due to growth expectations. Weak figures may trigger concerns about slowing economic activity. Currency markets respond to shifts in growth outlook.
Example
If companies increase spending on new factories and automation equipment, business investment rises and contributes positively to GDP growth.