Capital Expenditure Increases in the Technology Industry

Over the course of the last century, there has been an incredible development in the technology that is used by the world. It was not that long ago that individuals were still using a horse and buggy to get around. Today you are able to simply hop on a plane and be across the world in a matter of hours. It probably comes as no surprise that one of the largest drivers of the economy today is the technology industry.
In the first quarter of the financial year of 2018, one of the largest drivers of capital investment has been stocks from technology companies instead of the traditional industrial giants. When you take a look at the numbers, you will see that capital expenditures are on the path to a growth of 25.9%. Over half of that growth is being driven by companies in the information technology industry. This growth is pushing technology companies stocks to a five-year high. A disproportionate amount of this growth has been posted by Google and Microsoft. A smaller but still significant percentage of this growth has been by companies related to cloud computing and semi conductors.
https://www.cnbc.com/2018/05/02/technology-companies-are-driving-a-capital-spending-surge.html
Earlier this year Pres. Donald Trump decreased the corporate tax rate from 35% to 21%. The extra capital that this decrease has generated has mostly gone into dividends and share buybacks rather than capital investments that are the typical movers of economic growth.
Industrial corporations are actually decreasing the amount of capital they use for investment. In fact, across the board, the overall rate of capital expenditure is decreasing except for that of the technology industry.
Consumer discretionary spending is another area that is pushing forward growth in capital expenditure however much of that comes from Amazon, another technology company. Capital expenditure is even increasing amongst smaller companies in the technology industry as many of them have been able to increase their spending. The overall growth rate is up to 48% during this quarter.
This will likely continue in the long term however in the short term for the rest of this year rate of growth are expected to decrease.

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