Digging deeper into business investment trends

A rising GDP is good for the U.S. economy and for beef producers. Here’s why.

Nevil Speer

August 7, 2018

2 Min Read
Digging deeper into business investment trends
Nevil Speer

By now you’ve heard the news: second quarter GDP (Gross Domestic Product) surpassed 4%.  And since that data has been released there’s been lots of discussion within the media about what it all means. Most importantly, there are enduring questions about the sustainability of that type of growth going forward. 

None of that is surprising. The media likes to focus on the headline GDP number. But digging underneath the headlines is often the more important discussion.

That’s precisely the intention of this week’s illustration. The graph highlights the relative contribution to GDP resulting from private, fixed investment (non-residential) in the U.S. economy. We last looked at this about six months ago: Business Contribution to GDP On The Upswing.

The trend is important to beef producers. In the six quarters leading up to the election, the average was only .09%. However, in the six quarters since the election, the average is running 0.95% - or better than ten-fold faster. That’s an important driver for the economy; businesses are reinvesting in the U.S. economy. 

Seemingly, business decision-makers are being purposeful about investing back into their companies. That’s a positive sign for the economy. And ultimately, that should also benefit consumer behavior through jobs and wages – not the least of which impacts beef demand.    


This all has potential implications for rural America. These same trends are likely reflected back at the farm/ranch – although we don’t get a snapshot of those numbers specifically. 

How does this trend reflect your business? What indications do you see in terms of confidence of the future direction of the U.S. economy? How do you see it playing out for beef demand? Leave your thoughts in the comments section below.

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY. Contact him at [email protected].

About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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