However, current contribution to the GDP from capital expenditures remain near historic lows, hovering around 0.2%, compared to the high of over 0.6% in 2000, according to Morningstar data.
“Equipment spending as a percentage of GDP is at near-record low levels,” Johnson said. “Instead, corporations are spending more of their money on stock buybacks and mergers and acquisitions at the moment. Unfortunately, this is slowing down productivity growth and the long-term potential growth of the U.S. economy.”
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, calculated that companies in the S&P 500 have bought back $148 billion of their own shares in the first quarter this year, compared to $132.6 billion in the first quarter of 2014. According to Goldman Sachs Group, Corporate America is not the best investor of its own company stocks. [Buyback ETF Theme May Forgo Long-Term Growth for Short-Term Gains]
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Max Chen contributed to this article.