We're About To Find Out Just How Nervous Businesses Are About The Fiscal Cliff

One of the weak spots in the economy appears to be business investment, and the story that gets told is that it has to do with the Fiscal Cliff, and hesitance to invest around that.

A recent Credit Suisse survey showed that 30% of businesses said they had put at least some projects on hold due to the issue.

Fiscal Cliff

Photo: Credit Suisse

More famous, however, is this chart of quarterly core CAPEX orders, which has rolled over hard.

It’s one of David Rosenberg’s famous recession warning charts.


Photo: BTIG

Anyway, on Tuesday we get the latest Durable Goods data/

Alex Kowalski at Bloomberg has a preview.

The Commerce Department’s durable goods report on Nov. 27 may show that excluding transportation equipment, where demand is often volatile, bookings dropped 0.6 per cent after increasing 2 per cent the previous month.

“What I hear from customers, what I hear from suppliers, what I hear from other CEOs that are running businesses is a real hesitation to step out and make big capital investments, to step out and take on big projects because of the ambiguity of what’s going on in the economy,” James Ryan, chairman and chief executive officer of W.W. Grainger Inc., the Lake Forest, Illinois-based supplier of tools and equipment, said during a Nov. 14 meeting with analysts.

This number is always volatile, but should be interesting to watch.

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