The great reindustrialisation

Investment is strengthening across advanced economies for economic & geopolitical reasons, with effects from commodity prices to macro policy & productivity growth

Over the past few decades, the manufacturing shares of GDP across advanced economies have reduced markedly. Manufacturing activity has relocated to China and elsewhere, leading to a rotation in the shares of world manufacturing. China has become the world’s largest manufacturer, and by a substantial margin.

Relatedly, gross (and net) investment shares of GDP have reduced across advanced economies over the past few decades – and reduced further since the global financial crisis despite low/negative interest rates.  From infrastructure to business capex, private and public sector investment has been muted across advanced economies – with some capital intensive activity migrating to economies like China.