It Looks Like One Of The Big Things Holding Back The Economy Is Finally About To Turn Around

Here’s a chart of public construction spending (highways, schools, etc.) as a percentage of GDP.

During the crisis, state and local governments got absolutely hammered, massively cutting infrastructure spending.

That pullback compounded the overall weakness, and it’s continued for years even after the recession has ended.

But it might finally be about to turn around.

A survey of dealers of Caterpillar equipment, performed by Credit Suisse, turned up this observation: “Dealers noted some signs of life in multi-family housing, automotive, hospitals, schools and data centres. Dealers also noted government spending has bottomed and energy in most cases remains solid, although mining is still dead.”

There are several signs of a rebound in the US economy. If government spending turns back higher, this is yet another significant tailwind.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.