Surging U.S. Corporate Spending May Offset Sequestration

By Michelle Jamrisko and Ilan Kolet - Jul 15, 2013

Companies in the U.S. are beginning to empty their deep pockets and boost capital spending as they look past the specter of sequestration and global growth risks.

Orders for capital goods excluding aircraft and military equipment -- an indicator of future business investment -- increased 1.5 percent in May, a third consecutive advance and the longest streak since October 2011. Chief executive officers are more optimistic about the economy, based on the Business Roundtable’s quarterly outlook index, which rose to 84.3 in the second quarter, the highest in a year.

Spending on information technology is up 4 percent this year compared with 2 percent last year, according to the median in a survey of 203 businesses by Computer Economics, a research company in Irvine, California -- helping businesses such as Microsoft Corp. (MSFT)

“Investment will pick up in the second half of the year,” driven by strength in housing and the automobile industry, said Yelena Shulyatyeva, a U.S. economist in New York at BNP Paribas. “For companies to start really benefiting, to be profitable in the future, they need to invest.”

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http://www.bloomberg.com/news/2013-07-14/corporate-spending-set-to-surge-in-u-s-.html