U.S. manufacturers plan to pull back on investing in 2020, a move that could rein in a rebound even as companies increase profits.
Factory executives forecast capital expenditures will decrease 2.1 percent in 2020. It would be the first annual decline in 11 years, Bloomberg reported, citing a semiannual survey from the Institute for Supply Management.
That compares to a reported increase of 6.4 percent in 2019. Managers at non-manufacturing firms expect a 1.3 percent rise next year, lower than 2019’s increase of 2 percent.
Thirty-eight percent of companies cited domestic economic conditions as the main reason for adjusting their spending plans; just 3 percent of those cited tariffs, while 44 percent cited other factors.
Data from the Institute for Supply Management show that manufacturing is contracting, but the report indicates a turnaround may begin in the first half of 2020 and gain momentum through the year.
Still, companies have held off on long-term investments due to uncertain trade policies, escalating tariffs and a moderating growth outlook — something that weighed on economic growth in the second and third quarters, according to the publication.