Capacity Constraints Could Stymie Economic Growth

Business investment outside of the energy sector continues to disappoint. And now many of the manufacturing industries that have been leading the rebound in exports are either at, or fast approaching, full capacity. In order for exports to continue to drive economic growth, we need to see a pickup in non-energy investment that is aimed at expanding productive capacity. Unfortunately, recently released investment intentions for 2016 were far more negative than expected.

Capacity constraints currently facing the economy have the potential to derail the recent economic momentum. Whether the recent economic recovery is truly sustainable will be determined by business investment decisions over the next few months.