One area where the U.S. has been lacking is infrastructure spending, which is needed for future growth.
Many saw the last recession as an opportunity to put Americans back to work by employing them in infrastructure projects , which would’ve also made the U.S. much more efficient.
“Even nations with higher GDP per capita are spending a much greater share of GDP on investment — i.e., Qatar, Hong Kong,” wrote J.P. Morgan’s Tom Lee. “Even Eurozone countries like Spain, Italy, and France have higher levels of spending, as does Japan at 21.2% of GDP is spending.”
Lee’s definition of fixed investment comes from the CIA which “records total business spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of raw materials, which provide the basis for future production.”
According to Lee’s work, the U.S. ranks #143 in construction spending, one slot ahead of of Greece.
Lee, who sees the S&P 500 surging to 1,775 by year-end, has argued that there is a lot of pent-up demand in the U.S. And he believes infrastructure is one are where demand could be unleashed and drive GDP growth higher.