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.