A $ 1.5 trillion tax reduction does not have a major impact on capital investment plans – survey

WASHINGTON (Reuters) – The Trump administration's $ 1.5 trillion tax package appears to have had no major impact on capital investments or corporate hiring plans, according to WASHINGTON (Reuters) a poll released a year after the biggest overhaul of the US tax code over 30 years ago.

The quarterly survey published by the National Association of Business Economics (NABE) found that although some companies have announced an acceleration of their investments due to the drop in their corporate tax, 84% of respondents said they did not have modified their plans. This compares to 81% in the previous survey released in October.

The White House predicted that mbadive fiscal stimulus, marked by a 35% to 21% cut in the corporate tax rate, would boost business spending and job growth. The tax cuts came into effect in January 2018.

"A large majority of respondents, 84%, say that a year after its adoption, the corporate tax reform has not brought their companies to change their recruitment plans or policies. 39, investment ", said

NABE President Kevin Swift.

The decline in tax rates, however, had an impact on the goods-producing sector: 50% of respondents in this sector reported an increase in investments in their companies and 20% reported having reoriented their recruitment and their investments to the United States.

The NABE survey also suggested an additional slowdown in business spending after being highly subdued in the third quarter of 2018. The measure of capital expenditure of the survey fell in January to its level the lowest since July 2017. The forecast of capital expenditures for the next three months has also weakened.

"Fewer companies have increased their capital expenditures compared to the October survey responses, but the reduction seems to be more concentrated in the structures than in the investments in technology. information and communication, "said Swift, chief economist at the American Chemistry Council.

According to the survey, employment growth has improved slightly in the fourth quarter of 2018 compared to the third quarter. Just over a third of respondents reported an increase in employment in their company in the last three months, compared with 31% in the October survey. The prospective measure of employment in the survey increased from 29 in October to 25 in January.

(Report of Lucia Mutikani, edited by David Gregorio)