America's Spending on Computer Gear Is Back at Its 2000 Level

US business investment in computers and communications equipment ran at 2.21% of GDP in the third quarter. The dot-com peak, in the fourth quarter of 2000, was 2.24%. Britain's figure for the second quarter was 0.66%.

Measured against the size of the economy, this hardware boom has returned to dot-com scale.

Worth noting: the line counts equipment only and excludes software. It compares today with 2000 on the same ruler, rather than inflating the present by folding in cloud services. Total capital spending is far larger, with data-centre buildings and software booked elsewhere.

The other side of a share that high is that growth now leans on the spending. No recession is required. If the line merely stops rising, that contribution to growth goes away. After 2000 it fell by roughly a third within three years, and the equipment kept running in the server rooms. What stopped was new orders.

Britain sits at 0.66%, a gap of 1.3 percentage points. What it misses is not only computing power but the purchasing, installation and maintenance work that comes with it. Same technology, two very different national accounts.

Source: US Bureau of Economic Analysis and UK Office for National Statistics (Image: @SoberLook)