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Maybe Productivity Will Save Investors From Inflation
Companies are spending on capital goods again, but will it work?
by James Mackintosh, The Wall Street Journal, Oct. 16, 2021

The basic case is that companies are investing again, and that higher capital spending quickly translates into a lift in productivity....Put simply: money is abundant, workers aren’t, so it makes sense to invest in machinery....

Data on new orders for capital goods show a giant rise as the recovery from Covid-19 took hold, after a much smaller fall than usual during the recession—excluding the volatile orders of aircraft, which fell sharply last year. New orders excluding aircraft and military spending (the military doesn’t help productivity) reached their highest on record in nominal terms in June; adjust for inflation and it looks less good, but still higher than the five years before the pandemic. ...
[end quote]

The article has lots of reasons why capital spending might not grow and might not suppress inflation even if it does. Capital spending is highly cyclical.

Capital goods companies include final product manufacturers (Caterpiller, etc.) and the engineering companies that make the components (Siemens, etc.). There are ETFs that collect industrial companies.

Open to suggestions.
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