u.s. firms blur investment picture by going \'lightweight\'

by:INDUSTRIAL-MAN     2019-09-05
Timothy appelle, New York (Reuters)-
Jinbeck once believed that large production machines with factories were an important part of manufacturers. Not anymore.
Chief executive of automatic feed, an 80-
Ohio Workers\' company, which makes machines for car factories, now rents most of his factories and their heavy equipment to another company that weld and cut metal for him on site.
This makes cash for him to hire engineers and programmers to design a new laser production line. Drive products.
\"It\'s a better way to do business,\" he said . \"
Baker\'s change in heavy metals is part of a bigger, more lasting shift in the way the US economy growsS.
Enterprise Investment.
Companies no longer invest in buildings and big machines, but more in software and high technology.
Usually lighter and cheaper technology equipment than the \"monument\" in the past.
For example, many companies are moving to cloud services
They were asked to purchase and maintain office operations of their own systems.
This shift has taken place so quickly that official investment data simply do not fully reflect what businesses are doing to expand and boost capacity.
As fed chairman Janet Yellen and other officials continue to debate whether to raise interest rates, they have only noticed a slight rebound in investment spending, but compared with the headline data, this may not be so worrying.
The Commerce Department tracks spending on software, research and development and \"Art originality\" such as books, movies, music and even greeting cards.
But, for example, it does not include the cost of training workers to use new machines or hiring more paid experts to maintain the machines.
Investment data has also been blamed for failing to capture the full impact of falling prices.
For decades, economists have argued that employment is growing at the same pace as investment.
Now, despite the high profits and healthy balance sheets of companies, their spending is not growing as fast as the recovery in the past, although they have been recruiting.
Tim Quinlin, economist at Wells Fargo Securities, pointed out that current equipment spending is only 15% higher than the previous level. recession peak.
In the three cycles where the previous duration was long enough, the equipment expenditure increased by nearly 2 out of 3 on average than the previous peak.
This shift has drawn the attention of Washington.
Jason Furman, chairman of the White House economic advisory committee, said in a speech last month that most of the slowdown in investment that has plagued many policymakers and economists since 2010 can be attributed to slower growth in equipment spending.
However, in intellectual property and other non-
The growth of physical assets accelerated.
Unlike investments in machinery, new technologies and knowledge
Furman told Reuters how to produce results that are also beneficial to other businesses.
\"We know it has a positive spillover effect. \" (
Everyone is the winner, though.
SHEDDING tnicholas Bloom, a Stanford economist studying business investment trends, said spending in areas such as R & D and software tended to be higher --Technical workers.
\"It does help to increase productivity, but it may also reduce productivity,\" he said . \"
It is easier for skilled workers to replace. \"Many old-
Bloom said fashion equipment manufacturers must also upgrade their products, move production overseas, or make up for the weakness of domestic demand by exporting more products to developing markets.
Buehler Aeroglide, an industrial dryer manufacturer for dog food and grain factories, is an example of a weight loss company.
\"Customers definitely want smaller machines . \"S.
A subsidiary of the Swiss Buehler Group.
The company reduced their size by fifth by allowing air to pass through some devices faster.
Interviews with manufacturers representing a wide range of industries and regions show that many have no plans to return to the old way.
They say they may invest more when growth accelerates, but they will continue to do so-
Intangible assets such as patents and new product development.
Madison Industries in Chicago
One example is a US-based manufacturer with sales of about $5 billion, producing filters and medical equipment.
Larry Gies, chief executive of the company, said his customers are increasingly demanding specialized products.
Not a lot of the same goods.
\"When you need such flexibility, you usually need more labor than a machine that outputs the same thing over and over again.
Falling prices also played a role.
\"The unit cost of everything I bought --
Software, robots, machines, you call it-
\"It\'s gone,\" says Gies . \".
\"So that I can get the same result, but at half the cost.
\"Mark Bissell, ceo of vacuum maker Bismarck Homecare Inc. , said he now spends 10 to 15% less on equipment than he did three years ago. The reason?
Basic technology for manufacturing vacuum
Plastic molding, for example
The change is not big, so there is no need to splurge on the new machine.
\"Our investment has actually increased, but the structure has changed,\" he said . \" He notes that as his industry competes to integrate new electronic features and wireless technologies, he spends more on patent and engineering work than ever before.
Some business leaders say the depth of the last recession has changed the way they invest.
Buildings and machines can last for many years and can quickly become albatross during the economic downturn.
Baker, CEO of automatic feed, said he was forced to fire 70 employees
Most of his employees
In 2010, a day after the auto industry fell into free fall, free fall appeared in his company supply.
Even before the recession, Baker had begun upgrading his equipment and realized that it would be better to spend money on developing a machine that uses lasers instead of steel knives to cut metal.
He said: \"We really don\'t have a budget for capital equipment anymore. I like this. \"(
The report of Timothy Eppert;
Edited by Tomasz Janowski)
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