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Friday, June 10, 2011

Companies adding equipment at a faster pace than they’re adding personnel

As the economic recovery continues, companies are more likely to ratchet-up their spending on equipment and other capital improvements, before adding jobs to their expense line.  That’s according to a story in today’s New York Times (click to link).

Implications:  Just as with cars, furniture, and personal computers enjoyed some post-recession lift due to pent-up demand, companies that put-off major investments for a time seem to be resuming those improvements… except where adding staff is concerned.  Perhaps even large, one-time expenditures seem less risky than adding personnel (a recurring, long-term expense).

It all brings us to the frustrating “chicken or the egg” dilemma; which comes first, higher employment numbers, or a robust economic recovery?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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