U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009.
Meanwhile, Europe is now officially in a recession, for the first time since 2009:
Figures released today showed that collectively the economies of the 17-country eurozone contracted by 0.1 percent between July and September. While this is a slight improvement over the second quarter of the year when it shrank by 0.2 percent, the definition of a recession is two straight quarters of contraction. Most analysts believe that the recession will continue at least until the end of 2012.
The relatively small size of the overall contraction doesn’t show the full scope of the problem facing Europe. Some nations — notably France and Germany — even saw their gross domestic product expand. Howard Archer at IHS Global is one of many analysts who do not expect these expansions to continue.
“Latest data and survey evidence remain generally weak, and the odds currently strongly favor the eurozone suffering further GDP contraction in the fourth quarter of 2012,” he said. “Significantly, Germany looks to be in severe danger of contracting in the fourth quarter, as does France.”
Indeed you don’t have to look very far to see how widespread the economic slowdown is.
Industrial production for the entire eurozone fell 2.5 percent in September from August, according to Europe’s statistics agency, Eurostat. That is the largest one month decline since January 2009 and one that totally reversed the 0.9 percent increase in August.
The arc of history is long, but it bends towards justice. And boy does the 21st-century West deserve some justice!