Spying by intelligence agencies got you down? Take heart. There’s good news out there, too.
For example, businesses can now deduct the full cost of large equipment and other non-real estate assets — in the past they could only deduct a portion — thanks to the recent GOP tax reform legislation. And they’re turning around and reinvesting those savings in business.
General Motors, AT&T, Walmart and Verizon are among the top spenders for the first period of the year, and Royal Caribbean and Raytheon are among those posting the biggest increases,according to the report. The largest growth was in the technology industry.
In manufacturing, 86 percent of companies are investing in new equipment and facilities, according to a National Association of Manufacturers survey published last week.
“Manufacturing in America is now rising to new heights, thanks to tax reform, and as a result, manufacturers of all sizes are already investing more, growing more, hiring more and paying more,” association board member David Farr, the chief executive officer of Emerson Electric Co., said in a statement. “They are already improving lives and livelihoods.”
Much of the money being spent comes from another break under the law, which lets companies bring overseas cash back to the U.S. without penalty after paying a one-time levy of 15.5 percent.
Consumer technology giant Apple, for example, is reinvesting $350 billion in the U.S. economy and building a new corporate campus. The Cupertino, Calif.-based company also said it would buy back $100 billion in stock.
Top chemical manufacturer DowDuPont announced earlier this month it would invest $45 million in a new Newark, N.J., plant. A spokesman said it was not prompted by the tax cut, but rather was “about having manufacturing facilities that support business growth.”
According to the Wall Street Journal, reinvestment in businesses — capital spending, or Capex — is on its fastest pace since 2011.
Capex is good for the broader economy, helping boost short-term GDP numbers and laying the foundation for future growth.
There are changes coming that may make that investment drop off — caps on interest deductions, a change is how business income is defined — and will likely be part of mid-term discussions as the GOP tries to hold onto Congress. But for now, the economy is slowing trending up. So go ahead and take that vacation while you can.