Though S&P capex spend is rising on a Y/Y basis once again, excluding Internet retail, capex is still 7% below pre-pandemic levels, suggesting plenty of room for improvement, especially in light of record earnings and supply side problems. Reshoring was taking place even pre-COVID, but the pandemic has highlighted weakness in global supply chains, likely accelerating the shift from global to local. Andrew Obin notes technology has been the biggest drag on US manufacturing capex over the past 20 years as tech manufacturing has been sent offshore, but semiconductor reshoring is poised to provide a boost moving forward. Andrew sees industrial automation as the greatest beneficiary of reshoring as companies substitute capital for labor in the face of a less skilled US work force. And Savita Subramanian sees Financials as a beneficiary of a capex cycle as the economy improves and rates rise. Financials are also labor light which helps the sector to better handle higher wages

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2021 Bank of America Corporation. All rights reserved.