Companies Also Have A Spending Mood This Holiday Season

Consumers are not the only ones to open their wallets this holiday season. Companies are expected to accelerate capital spending in the coming weeks to enjoy a tax break right through December 31.

Business investment could boost next year when the benefit is reduced by half, but surveys show companies plan to continue to devote part of their large cash reserves in new equipment to increase productivity and to replace the gear to use.

With consumer spending gains mean low income insecurity, companies could remain a reliable pillar of growth.

"Business investment was a light that shines in the economic recovery," said economist Paul Dales at Capital Economics.

Costs for building structures and equipment, and software sales increased 15% in the third quarter. Non-defense capital goods shipments excluding aircraft - a good indicator of business investment - are up about 10% this year.



Last week's report showed durable goods such shipments fell 1.1% in October, but are often the first month of each quarter, says Mark Zandi, chief economist at Moody's Analytics.

It expects capital expenditures to increase by 8% in the fourth quarter as companies struggle to get the full tax benefit. So you could rein in spending in the first quarter, Zandi still expects to increase spending by 7% next year.

Dales said financial turmoil in Europe could lead to a pull-back.

Until now, many people seem bullish. More than half of the 70 companies surveyed recently by the large National Business Economics in a plan to increase investment for next year.

Companies are reluctant to hire, but are willing to increase efficiency, in part, by what you can do more with fewer workers, said Shawn DuBravac, chief economist at the Consumer Electronics Association and head of the panel forecast NABE. Finally, he says, more investment leads to more hiring.

Tools International America, which makes machines parts factory sealed boxes, spent U.S. $ 400 000 in new equipment this year - 60% more than last year, Vice President John Konvicka said. The Company of Minden, Nevada, hired two employees to operate the machines.

The company acted after the country's exports rose 25% as a weaker dollar makes U.S. goods cheaper for foreign buyers to buy, Konvicka said. He plans to spend $ 2 million on a new building and equipment next year.

Window Maker Mannix of Brentwood, New York, is the purchase of new plant-speed $ 50,000 - your investment for the first time since 2008 - to enjoy a renaissance of high-rise building in Manhattan.

And how to roll, Texas Chainsaw, which allows customers to quickly adapt the sushi is to add seven locations in California, Florida and Arizona, the first quarter, and $ 200,000 each.

Each roll 10 pieces for $ 6, "in this economy, we are a good option," says Yung Yuen, Managing Director.