If your company is still on the sidelines of the business investment blitz, sitting on cash as it has been over the past few years, it needs to come off the bench and get in the game, as the competition is likely in play already. Nearly all market and economic reports are pointing to healthy business conditions and a sustained rise in capital expenditures, the latest of which is the Institute for Supply Management’s (ISM) up-to-the-minute manufacturing forecast.
The experts are all repeating, “Strong underlying fundamentals” — no drastic policy changes in a midterm election year, stable-to-moderate commodity price growth, stabilizing debt, low-cost energy. Also consider this: The average age of core capital equipment is almost 22 years old. And consumer confidence is highest in six years, but perhaps most telling, the Fed thinks its economic stimulus will no longer be required after this year.
All of this has many CEOs and CFOs unshackling themselves from the stale grip of doubt. At last week’s ISM conference, Mark Zandi, the prominent economist of Moody’s Analytics, said, “The feel is palpably different now, for the first time since 2005.” To those who are still feeling gun-shy, Zandi offered this: “I’m not sure what other catalyst there is to spur confidence. This is the time to go. You can’t afford to lose share, or else you’re done.”
William Ng, Editor-in-Chief, firstname.lastname@example.org.