Economics
A Missing Piece of the Global Growth Is Starting to Fall Into Place
- Robust world economy is spurring factories to ramp up spending
- Economists say faster investment could lift wages, inflation
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A missing piece in the global growth jigsaw appears to be falling into place.
Spurred by higher profits and buoyant stock markets, some of the world’s best known companies from Amazon.com Inc. to Volkswagen AG are ramping up spending on new plants and equipment after years of caution. For an international economic expansion already gathering speed, that could prove a boon.
The thinking is that capital investment, or capex, will stoke not just demand, but ultimately higher wages and inflation. That’s a positive for central banks and governments yearning to see profits trickle into workers’ pockets. Employers have been reluctant to spend even amid an economic upswing spanning 75 percent of the globe.