(Fixed) Investment (from NIPA accounts)

Importance: ***

Definition: Fixed Investment spending accounts for about 14% of the GDP and covers two categories:
    1. nonresidential investment (spending on plants and equipment)
    2.  residential investment (single-family and multi-family homes)
Fixed investment is a flow that represents the change in the stock of installed capital in the economy.

Related Indicators: A related concept is that of the change in inventories in the GDP accounts that measures the change in the stock of unsold goods.

Source: Department of Commerce, Bureau of Economic Analysis,. NIPA dataset.

Frequency: Quarterly, revised monthly. The investment for a given quarter is released together with the GDP figures  in the first month following a quarter as the "advance estimate". The "preliminary estimate" is published in the second month, followed by the "revised" estimate in the third month.

Availability: Three to four weeks following the reported quarter
Direction:  Pro-cyclical

Timing: Leading indicator

Volatility: High

Likely Impact on Financial Markets on:

Ability to affect markets: Medium. The GDP report, which the investment is a part of, has strong effects on the market.
Analysis of the indicator: Investment is the most volatile component of aggreate demand (together with the change in inventories) as investment decisions by firms are based on expectations of future economic growth, profits and interest rates. In a recovery from a recession, investment tends to grow much faster than GDP while when the economy contracts investment falls much more sharly than output.

WEB Links

Graphs of the latest non-residential and residential investment data from The Economic Statistics Briefing Room of the White House

A table with the most recent non-residential investment data; another one with data on  residential investment and a summary table on the GDP and its components.

The latest GDP report from the BEA includes an analysis of the investment trends in the latest quarter
See the Dismal Scientist Homepage for charts, tables and analysis of the latest report.
You can chart investment, its components and other NIPA data from the NIPA VISUALIZATION PAGE

You can see Investment charts with theEconomic Chart Dispenser

You can create customized consumption charts with the Economic Chart Maker  Tip: type "INVESTMENT" in the Label section of the form and choose the transformation of the data you are interested in.

An analysis of the 1997-Q-3 GDP report from First Union

An Analysis of the 1997-Q3 GDP report from Morgan Stanley's Stephen Roach
An Analysis of the 1997-Q2 GDP report from Morgan Stanley's Stephen Roach