Investment Falls Off a Cliff WSJ By SUDEEP REDDY and SCOTT THURM
"U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined."
Among the companies cutting capital-spending targets, the biggest concentration is in the energy industry, where natural-gas prices are near record lows.
Devon Energy Corp. DVN -0.15% spent $6.2 billion in the first nine months of this year, up 13% from the same period last year, with boosted spending on oil projects.
But capital spending next year will be "significantly less than 2012," particularly in acquiring new leases, Devon chief executive John Richels told analysts."
Productivity investment was the one bright spot in our economy along with domestic energy. We can all be sure Obama resurgent 'faith' in breaking our economy for 'investment' which will make no difference in the GW religion models will cause even more slowing.
This lack of investment in natural gas is good for the eventual price adjustment to the marginal cost of production. But general economic growth will slow as companies are running out of efficiency investments.
Makes LINE a better holding in domestic energy than other choices - I think. Also means some distressed gas and lng properties come on market.
Seems we are down to fed manipulating mortgage rates to keep housing stable. The longer manipulation works the greater the chances of unintended consequences.