US companies need to get in on the act

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US companies need to get in on the act. While things are looking better on the US economic front, the primary drag continues to be the state of capital spending by the business sector. For the past six years, US firms have only replaced depreciated assets and have not added to the economy's overall capital base, but this process will have to cease if the US recovery is to improve. There is no doubt that US businesses are cashed up and at some stage, the US Fed will be hoping that company management turns its focus from investment returns (via buybacks and other capital management techniques) to long-term investment. However, the forward looking orders does not suggest that any change is imminent, and that the recovery remains well and truly in the hands of the consumer, which will weaken its potential and sustainability. Read more: (VIEW LINK)

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