Survey Shows Tax Reform Likely Will Not Increase Spending
Even with a tax reform passed by the Trump administration, corporate spending will likely not see an increase, according to a report from the Association for Financial Professionals (AFP). Forty percent of the 640 corporate treasury and finance executives surveyed do not expect their spending to change in the near future.
Even though 60% said they will increase spending, this spending comes in the form of paying down debt and pulling foreign cash back into the U.S., not buying more goods. AFP President and Chief Executive Officer Jim Kaitz said in a statement these companies are acting cautiously with their money, waiting for the right moment to spend the saved money.
Conversely, State Street Global Advisors' Senior Managing Director and Global Head of Cash Business Yeng Felipe Butler said in a separate statement businesses are holding off on spending because of rising fears surrounding the U.S. economy's growth.
A majority of the survey respondents—59%— do not anticipate seeing changes in short-term investments for their firms; only 10% anticipated a change. The findings in this survey match that of another survey by AFP released in May, titled Corporate Cash Indicators Report.
—Christie Citranglo, editorial associate