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Tag >> capital expenditures
CEOs continued to grow more upbeat about the overall economy and their own company's prospects.
According to the results of Business Roundtable's first quarter 2011 CEO Economic Outlook Survey member CEOs estimate real GDP will grow by 2.9 percent in 2011, an increase from the 2.5 percent expected in the fourth quarter of 2010.
U.S. manufacturers are planning to boost hiring and capital expenditures this year. However, they warned they may not bring on as many people as they would like to. Why?
They are having trouble finding qualified candidates. They say there is a shortage of skilled machine operators and welders.
Manufacturers are also concerned about the increase in health insurance costs.
While much of the focus of the pending tax cut package seems to be on the reductions and breaks for individuals, there are some goodies tucked in for corporations as well.
They include a two-year extension of the research and development credit, which covers employment costs of employees involved in research, and $22 billion for accelerated depreciation, which allows companies to write off all of their costs of assets placed in service after September 8, 2010 and through December 31, 2011, in one year. This will be followed by 50 percent bonus depreciation for assets purchased during 2012.
Chief financial officers of middle-market companies are generally upbeat about the economy and their hiring plans.
Nearly half (47 percent) of the CFOs who participated in GE Capital's quarterly survey said they expect the US economy to be stable while another 37 percent said it is "improving" over the near term. This suggests little chance for a double-dip recession in the months ahead, GE Capital asserts.
Small business owners prefer spending money on their company than on people.
According to a new biannual survey which gauges the mood and sentiment of small and medium sized business owners, nearly two-thirds (63 percent) plan to increase capital spending during the next six months. This is up sharply from 49 percent in the spring, according to the PNC Economic Outlook survey.
The Federal Reserve recently reported that nonfinancial companies had $1.84 trillion in cash and other liquid assets as of the end of March, up 26 percent from the prior year and the largest sum since 1952, when these kinds of records began to be kept.
So, various interest groups have been urging companies to spend this money-on dividends, buybacks, acquisitions, additional employees.
Posted by Ron F in recovery, recession, Obama Administration, Obama, jobs, joblessness, employment, economy, earnings, demand, cash position, cash management, Cash, capital expenditures, capex
There's a political debate heating up about companies' hesitancy to invest the cash they're sitting on.
Essentially, the Democrats--or at least those in favor of further government stimulus measures such as a jobs program or at least extended unemployment benefits--argue that companies are wary of spending because of the lack of aggregate consumer demand.
Posted by Ron F in Tax, TARP, recovery, recession, economy, demand, default, consumer spending, Congress, cash management, cash concerns, Cash, Carmen Reinhart, Careers/Management, capital expenditures, capex, Banks
A survey released today by the Association of Financial Professionals will do nothing to dampen the austerity versus stimulus debate.
To wit: Forty-three percent of US corporations had larger US cash and short-term investment holdings this May than they did six months earlier. Only 24 percent of respondents reported that their short-term holdings had shrunk during the past six months.
Don't look for small businesses to lead the economic recovery.
The monthly reading from the National Federation of Independent Business Index of Small Business Optimism clearly shows little optimism among small business.
Capital expenditure among US companies fell more than anticipated in 2009 and although the trend is expected to reverse this year and next, growth is most likely to be modest.
Capex fell by 16.6 percent in 2009, compared with a 9.9 percent decrease projected by Fitch Ratings. The difference was largely driven by the fact that revenue was 4 percent lower than Fitch forecasted for 2009.
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