The trend toward knowledge investments and away from traditional investments in fixed assets such as equipment and structures continued in the 1Q in the US. Investment in intangible property products now account 4.1% of GDP. This is the highest percentage on record for this series and a continuation of the upward trend that has been in place since WW2. Structure’s share of GDP decline to 2.8% and equipment’s share of GDP was flat at 5.9%.
On a SAAR, investments in intellectual property products increased by 7.99% year-over-year. This compares to a 5.6% YoY% change for investments in equipment. Investments in structures actually declined by nearly 1% over the past year.
Intellectual property products contributed 30 basis to real GDP in the 1Q. IPP was the lone bright spot for real GDP from a nonresidential fixed investment standpoint . Structures dragged down real GDP by -75 basis points and equipment didn’t contribute to real GDP. Overall, even with the positive contribution from IPP, nonresidential fixed investment subtracted 44 basis points from real GDP in the 1Q.