CEO's say that they will increase capital spending

In terms of the overall U.S. economy, member CEOs estimate real GDP will grow by 2.9% in 2011, an increase from the 2.5% expected in the fourth quarter.
According to the survey, 92% of CEOs expect their companies’ sales to increase in the next six months, a 12% increase from the fourth quarter of 2010. Meanwhile, 62% expect their companies’ capital spending to increase, compared to 59% in the fourth quarter, while 52% expect their companies to hire more workers, up from 45% last quarter.
The survey was completed between Feb. 28 and March 18 and responses were received from 142 member CEOs.

http://blogs.wsj.com/economics/2011/03/30/ceos-expect-to-boost-sales-hiring-spending/?mod=WSJBlog&mod=marketbeat#

Capital Spending on the Rise

As Equipment Purchasing Surges, Unemployment Remains High

Many companies are ramping up equipment purchases to boost productivity, reinforcing a gap between capital spending and employment in the United States.
Corporate investment will rise 11 percent this year as sales pick up, following a 15 percent gain in 2010, according to “Man vs. Machine,” a Feb. 2 report from Bank of America Merrill Lynch. Employment will grow just 1.7 percent, after a 0.7 percent increase last year.
Inventory rebuilding, low borrowing costs and government policies that include a new tax break on equipment purchases are powerful spurs for capital spending, said Neil Dutta, the Bank of America economist behind the report. The job market lacks such drivers and will form a “mediocre” underpinning for household spending, the biggest part of gross domestic product, he said.
The Institute for Supply Management’s manufacturing index has risen for seven consecutive months, surging in February to the highest level since May 2004. Although the labor market is “improving gradually,” unemployment remains “elevated,” according to the Federal Reserve. The jobless rate could hold at 8.9 percent in March for a second month, the lowest since April 2009, based on the median forecast in a Bloomberg News survey ahead of Labor Department figures due April 1.