Businesses Spending On Equipment Again, Study Finds

Businesses are spending on technology and supplies again, according to a new survey, a sign that they are gearing up for growth as part of the recovery, analysts say.

Sales to American businesses through U.S. distributors, commercial technology firms and even companies that sell office supplies increased by 12 percent to $59 billion last year, pulling business spending back up to pre-recession levels, according to a report by NPD Group, a global consumer and retail market research firm.

"Business spending was pretty poor during the recession, it's taken two years to get back," said Stephen Baker, retail analyst at NPD adding that this kind of investment virtually ground to a halt.

According to the report, small and medium-sized businesses also spent 33 percent more on computers, with sales rising to $6 billion. Software sales were up 12 percent, to $4.2 billion.

Last month, Dell, the world's third-largest supplier of personal computers, reported quarterly profits were up as businesses replaced old equipment, Businessweek reported.

“Business investments in infrastructure are an encouraging sign for the overall economy,” said Stephen Baker at NPD in a statement. "Spending on IT products, especially, has traditionally been a way for businesses to invest in future company growth," he said.

Last year, Commerce Department figures showed business investment spending rose by 17 percent, the largest increase since 2006, Reuters reported. Analysts told Reuters the massive increase in spending amounted to companies making up for lost time after emerging from the recession.

As the economy began recovering in 2009, weak business spending was flagged as one of the factors slowing the recovery.

Comments

[TJustice]

04:10 AM on 03/16/2011

Glad they are not fearful with these record profits and greatest wealth disparity.

[OldTulsan]

02:25 PM on 03/15/2011

But are businesses hiring in the U.S.?

[tleb]

01:18 PM on 03/15/2011

I sell a lot of equipment, none of it is from China... I sell electric motors, motor controls, industrial radio controls, wire/festoon, machined parts ect.

Besides that, VW just built a new plant in Tenn., Nucor Steel is starting a billion dollar plant in LA, ThyssenKrupp just finished a great big plant in LA recently, Intel is building new plants in Arizona, Boeing is speeding up production lines.... I can go on and on about stuff that is made in USA.

[rascalcat]

12:54 PM on 03/15/2011

China says, "Thanks."
 
If we had not shipped most of these jobs out, this could be leading a recovery.

[tleb]

07:20 PM on 03/15/2011

Airplanes dude. USA makes airplanes. The USA also makes satellites and has a space program. What kind of return on investment does China get ruining their environment? Not as big as what Boeing is learning from space programs and developing new aircraft.

I'm sure you are not aware that 3/4 of every chip that Intel makes is Made In USA and most are exported. Steel companies like ThyssenKrupp and Nucor are expanding in Louisiana building billion dollar plants and creating good paying jobs with benefits. Car makers like VW are rushing to USA to make the cars like the Passat, why? B/c it is cheaper to make them here with our SUPER PRODUCTIVE workers, most productive in the world, and reliable resources and free movement of commerce between states.

Don't get me started on innovation... USA has it, and there is a reason. IBM was awarded 5,000 patents last year alone. IBM is making supercomputers for National Laboratories that are looking for breakthroughs in battery technology and energy.

Keep your eyes open as spring comes... you might find yourself smiling and proud to be an American.

[logicanada]

12:41 PM on 03/15/2011

Good news ! - for China.

[OldTulsan]

12:47 PM on 03/15/2011

You noticed the photo of Dell boxes too.

[tleb]

07:22 PM on 03/15/2011

The most expensive pieces of a Dell computer are made right in USA. The Intel chip and the Windows operating system. 3/4 of Intel's chips are made in USA.