Buffett said his Omaha, Nebraska-based company spent $9.8 billion last year on plants and equipment as he bolstered railroad and utility units. That’s an increase of about 19% from the prior year, he wrote.
Twenty% of 50 executives surveyed monthly by the Equipment Leasing and Finance Foundation based in Irvine, California, projected in February that demand for leases and loans to bankroll capital expenditures will rise over the next four months, an increase from 12% in January. Thirty- seven% of the respondents predicted their companies would boost spending on business development activity in the next six months, up from 30% the prior month.
Signs that consumer demand held up at the start of the year even as a two percentage-point increase in the payroll tax reduced take-home pay are another reason companies are willing to invest. Cars and light trucks sold at a 15.3 million annual rate in February, capping the strongest four months since early 2008, according to data from Ward’s Automotive Group.
Auburn Hills, Michigan-based Chrysler said Feb. 28 it will invest $374 million to increase output of transmissions.
Toyota Motor Corp., which built a record 1.78 million cars and trucks in North America last year, is completing a $400 million expansion of its Princeton, Indiana, plant where it’s consolidating production of Highlander sport-utility vehicles. The investment will create 400 jobs, the company said.
Honda Motor Co., the first Japanese automaker to build cars in the U.S., is also completing upgrades at auto and powertrain plants in Ohio and Alabama worth more than $800 million that will open up another 600 jobs.
The residential real-estate recovery is providing added impetus. Purchases of new homes, logged when contracts are signed, jumped in January to a 437,000 annual pace, the strongest since 2008, the Commerce Department reported. Sales of previously-owned houses climbed to a 4.92 million annual rate in January, and the number of available properties slumped to 1.74 million, the lowest level since 1999, the National Association of Realtors said.