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On the front page of the Wall Street Journal deadtree edition for Wednesday, April 8, 2009:
On the front page of the Wall Street Journal deadtree edition for Monday, March 9, 2009:
The New York Fed released its latest Empire State Manufacturing Survey today. Buried in the answers to supplementary question was some modestly good news for sellers of IT equipment:
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The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved for the sixth consecutive month in January. The general business conditions index climbed 11 points, to 15.9. The new orders and shipments indexes posted similar increases, and the unfilled orders index rose above zero. Both the prices paid index and the prices received index rose significantly, with the latter moving above zero for the first time in more than a year. Employment indexes advanced into positive territory. Future indexes were highly optimistic; activity and employment were widely expected to improve over the next six months. Prices, however, were expected to continue to climb in the months ahead.
In a series of supplementary questions, manufacturers were asked about their capital spending plans… Looking ahead to the next six to twelve months, 44 percent of respondents indicated that they expected to increase capital spending relative to its level in the past six to twelve months, while just 12 percent anticipated a decline. When the same question had been asked in October 2007, 42 percent of respondents had anticipated increased capital spending, while just under 19 percent had expected reductions. The most commonly cited factor behind increased investment was a need to replace IT (information technology) equipment, followed closely by a need to replace other capital goods. The most widely cited factors behind steady or decreased capital investment were low capacity utilization and low expected sales growth.
(Emphasis added.)
Purchases of new IT equipment that were delayed due to poor business conditions will be moved forward this year. Another teetering step toward recovery, if only the federal and state governments would get out of the way.
This is funny enough to hurt.
General Motors gets bailed out by the federal government. Prez B Cool vows to be hands-off, no meddling. Now Washington is telling GM how to run its assembly lines:
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The Obama administration auto task force that oversaw GM’s reorganization last spring was startled to learn that the industry standard for plants to be considered at 100% capacity was two shifts working about 250 days a year. In recommending that the government invest about $50 billion in GM, the task force urged the company to strive toward operating at 120% capacity by traditional standards.
But industry manufacturing experts are skeptical, noting that the federal task force had limited automotive experience. “Do those guys understand the business?” asked Ron Harbour, whose Harbour Report is a widely followed analysis of auto-plant efficiency.
Not to be outdone, Hugo Chávez of Venezuela has told GM (and Toyota) to increase production of cars in that country to fill the demand created by (government subsidized) 7¢ per gallon gas:
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Whether Mr. Chávez moves to nationalize outright, he indicated his government would turn up the pressure on car companies. He said his government is going to apply strict quotas regarding the number and types of vehicles auto makers can produce.
The nature of the Venezuelan car market may make it unlikely that Mr. Chávez gets what he wants…
The command economy: pronounce, and it shall be done.
Must be nice to be so blindingly brilliant.
