Investment in business structures: Few bright spots emerge in an overall weak outlook

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Nominal investment in overall power and communication facilities fell around 20% from US$150.5 billion in Q4 2019 to US$119.8 billion in Q1 2023. As a result, investment in these facilities as a share of total business investment in structures declined from 22% to 17%. During this period, although nominal investment decreased in electric (-17%) and nonelectric power facilities (-46%), it increased in communication facilities (11%).

The demand for communication facilities increased during the pandemic. Communication facilities include telephone, television, and radio, as well as buildings and structures for distribution and maintenance of these facilities. Real investment in these facilities increased during the pandemic and stayed above the prepandemic level until Q4 2021, after which it gradually declined. 

A look at investment levels in other structures

In addition to the five main sectors, 19% of business investment in structures fell into the “other” category in Q4 2019. This amounted to a nominal investment of US$132.9 billion, which declined by around 10% to US$120.0 billion in Q1 2023.

In Q4 2019, over 70% of investment in structures in the other category went into four subsectors, and by Q1 2023, this combined share fell to 66%. These subsectors include lodging facilities, education and vocational structures, amusement and recreation facilities, and transportation structures. In real terms, combined investment in these four subsectors was 33% below the prepandemic level in Q1 2023.

The largest share of investment in other structures was in lodging facilities, but due to the pandemic, investment took a hit. Even in Q1 2023, investment in nominal and real terms was below the prepandemic level (figure 9). This trend also holds true for amusement and recreation structures, as people stayed home due to pandemic-induced lockdowns. In fact, in real terms, investment has not recovered in any of the major subcategories within other structures. However, in nominal terms, educational and vocational facilities, and transportation facilities were exceptions as investment recovered and was above the prepandemic level as of Q1 2023.

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