1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 18
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
New Technologies Tend to Require Heavy Capital Expenditures
U.S. railroads builds (cumulative
miles, thousands)
300
250
200
150
100
50
0
1830
1850
1985
1987
1870
1890
1910
1930
1950
Fibre route miles (thousands)
180
160
140
120
100
80
60
40
20
0
1989
1991
1993
1995
1997
Source: Based on U.S. data. FCC, St. Louis Federal Reserve, Scotia Wealth Management
Capex among the hyperscalers has surged as firms race to build out compute and data centre
capacity and power infrastructure, while private fixed investment in information processing
equipment and software as a share of GDP has surged to its highest level in a quarter-century,
(though it remains a touch below the long-term trend). While this has raised questions about the
feasibility of these investments and the possible risk of over-investment, the backdrop for this
cycle looks different from past periods of tech-heavy spending.
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