So I wanted to do this big post analyzing all parts of Equipment and Software investment and coming up with a grand theory but that was taking a long time in part. because it is hard to export graphs from BEA. Plus, I realized no one would read something that long anyway.

So we’ll do bits and pieces.

So you can break out investment in Equipment and Software into 4 categories. Information Processing Equipment, Industrial Equipment, Transportation Equipment and Other Equipment.

If you like to get all meta – which I do – then this makes sense. On one level we don’t actually ever “create” anything. We just rearrange atoms into configurations that are more to our liking.

So to do that we have to first figure out what configuration we want. This is the information part.

Then we have to go gets some atoms. This is transportation.

The we have reconfigure them. This is the industrial part.

Then we have to send the newly configured atoms to people who want them. This is transportation again.

Sometimes the atoms we want are located deep underneath the ground and we have to get them out. However, this extraction of atoms is mostly covered under “non-residential structures” not equipment because you use big honking machines that are attached to the ground.

So anyway. In this first post I want to compare the two “biggest” categories which are information processing and transportation. I put biggest in scare quotes because one of these categories has actually fallen to third place recently. It should be obvious which.

chart

So the blue line is investment in Information Processing and Communication equipment. The yellow line is investment in Transportation equipment.

Now these are indices marked so that 2005 is 100, for both. In actual dollar terms IT is significantly larger than transportation.

However, you can see that investment in transportation equipment simply cratered, falling by an astounding 70+% in 2008.

Disentangling investment in various transportation components will take some work and I’ll save that for a later post.

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