Hi Vicki, Yes, the respondents in various surveys are reporting that they are now investing and/or looking to invest in their operations. This is also confirmed by a pickup in new orders for capital goods. As for why, it has to be out of optimism about their prospects going forward. As for why they're feeling more optimistic... now that's a good question! My observation is that optimism is an inherent trait among entrepreneurs, and while they, in general, continue to voice concerns over regulations and taxes, they are sitting on piles of cash and are finally beginning to see the U.S. economy pick up the pace. Plus, a business can only make gains in productivity to a point before it has to expand its capacity. A lot of that has come by way of purchasing capacity through acquisitions, but as equity prices move higher that becomes an evermore expensive proposition. Investing in capital is the natural next phase. Which may be what we're entering into at this point...
You say some companies have started to invest their side line capital.
ReplyDeleteWhat has changed to encourage that?
Vicki
Hi Vicki,
ReplyDeleteYes, the respondents in various surveys are reporting that they are now investing and/or looking to invest in their operations. This is also confirmed by a pickup in new orders for capital goods. As for why, it has to be out of optimism about their prospects going forward. As for why they're feeling more optimistic... now that's a good question! My observation is that optimism is an inherent trait among entrepreneurs, and while they, in general, continue to voice concerns over regulations and taxes, they are sitting on piles of cash and are finally beginning to see the U.S. economy pick up the pace. Plus, a business can only make gains in productivity to a point before it has to expand its capacity. A lot of that has come by way of purchasing capacity through acquisitions, but as equity prices move higher that becomes an evermore expensive proposition. Investing in capital is the natural next phase. Which may be what we're entering into at this point...