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 because of the drop in their corporate tax, 84% of respondents said that they had not changed 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 vast majority of respondents, 84%, say that a year after its adoption, corporate tax reform has not led their companies to change their recruitment plans or to change their plans. 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 a further slowdown in business spending after a sharp slowdown in the third quarter of 2018. The measure of capital expenditure in the survey fell in January to its lowest level since July 2017. Expectations of capital expenditures for the next three months also weakened.

"Fewer companies have increased their capital expenditures compared to responses to the October survey, but the reduction appears to be more focused on structures than on 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.