Business Spending Won’t Be Back Anytime Soon
Kiplinger’s latest forecast on business equipment spending
Capital spending is likely in for a prolonged slump, both because of the current global recession, and because the efforts to contain the coronavirus will take time. Spending is not expected to pick up again until progress is made against the virus, because much of it is tied to business expansion plans, which are now largely on hold. Also, trade volumes are likely to drop because of declining demand for many goods. Expect business spending to fall between 10% and 20% this year.
Another drag on business spending is that it looks to be late in the year before Boeing will be able to get its grounded 737 Max aircraft certified as safe to return to service. Even when approval is given, the Federal Aviation Administration is requiring that each Max aircraft go through its own inspection process rather than Boeing’s. That is likely to delay the full return of the fleet. Southwest Airlines has taken 737 Max’s out of its schedule through October 30.
- 1Kiplinger’s Economic OutlooksRegularly updated insights on the economy’s next moves.
- 2GDP: -5.8% growth in 2020, down from 2.3% in 2019Kiplinger’s latest forecast for the GDP growth rate
- 3JOBS: States are reopening, but workers will come back slowlyKiplinger’s latest forecast on jobs
- 4INTEREST RATES: 10-year T-notes staying below 1.0% for a whileKiplinger’s latest forecast on interest rates
- 5INFLATION: 0.3% by the end of '20, from 2.3% at end '19Kiplinger’s latest forecast on inflation
- 6BUSINESS SPENDING: Down 10% to 20% in '20 - currently readingKiplinger’s latest forecast on business equipment spending
- 7ENERGY: Crude oil trading from $35 to $40 per barrel in coming weeksKiplinger's latest forecast on the direction of energy prices
- 8HOUSING: Total starts down 2.0% in '20Kiplinger's latest forecast on housing starts and home sales
- 9RETAIL SALES: E-commerce surge will endureKiplinger’s latest forecast on retail sales and consumer spending.
- 10TRADE DEFICIT: Widening 3% in ’20Kiplinger's latest forecast on the direction of the trade deficit.