Gross private domestic investment is the measure of physical investment used in computing

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

in the measurement of nations'

economic activity Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes w ...

. This is an important component of GDP because it provides an indicator of the future

productive capacity Productive capacity is the maximum possible output of an economy. According to the United Nations Conference on Trade and Development (UNCTAD), no agreed-upon definition of maximum output exists. UNCTAD itself proposes: "the productive ''resources'' ...

of the economy. It includes replacement purchases plus net additions to capital assets plus investments in inventories. From 2002 to 2011 it amounted to 14.9% of GDP, and from 1945 to 2011 was 15.7% of GDP (BEA, USDC, 2013).

Net investment In economics, net investment is spending which increases the availability of fixed capital goods or means of production and goods inventories. It is the total spending on newly produced physical capital (fixed investment) and on inventories (invent ...

is gross investment minus depreciation. Of the four categories of GDP (investment,

consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...

net exports The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...

, and government spending on goods and services) it is by far the least stable. Gross private domestic investment includes 4 types of investment: * Non-residential investment: Expenditures by firms on capital such as tools, machinery, and factories. * Residential Investment: Expenditures on residential structures and residential equipment that is owned by landlords and rented to tenants. * Change in inventories (or stocks): The change of firm inventories in a given period. ( Inventory or stock is the goods that are produced by firms but kept to be sold later.)

References

National accounts Gross domestic product {{macroeconomics-stub