Employment & Capital Spending Outlooks Strengthen

January 2011 survey conducted by the National Association for Business Economics (NABE) confirms that the underpinnings of the U.S. economy continue to strengthen. The survey notes that U.S. companies' employment outlook improved to a 12-year high this quarter. On capital spending, 62% of respondents said they planned to boost capital spending, up from 48% last quarter.

Shawn DuBravac, chief economist of the Consumer Electronics Association said, "The number of firms expressing positive hiring plans is at a level not seen in over a decade - a sign of improving labor-market dynamics. Supporting these hiring plans, industry demand continues to move higher, and profit margins are expanding." DuBracac added, "Firms are increasing their plans for future capital spending. A majority of respondents anticipate no increase or decrease in investment spending or employment in response to new tax policies, suggesting business decisions are being driven by the fundamentals of an improving economy."

Survey highlights included the following:

·  Expectations for economic growth have improved significantly. Over the last quarter, NABE panelists have become more optimistic. A majority (62%) assumes real GDP growth of 2% to 3% in 2011, and one in five panelists is building business plans based on an outlook of 3% to 4% economic growth.

·  Employment continues to improve, with 34% of firms reporting larger workforces compared to only 13% a year ago. The share of firms cutting jobs shrank, from an average of 13% over the past three quarters to 6% currently. The current NRI is the highest level it has been since 1998. The hiring outlook for the next six months also looks more robust - 42% of respondents indicated their firms will be increasing employment, up from 39% last quarter and 29% in January 2010. The employment outlook NRI hit a 12-year high.

·  The share of firms increasing their capital spending from the previous quarter rose slightly from the prior survey to 38%, while only 6% of panelists reported cutbacks in their firms. Expectations for future capital spending improved significantly, with 62% of respondents reporting higher planned expenditures, up from 48% last quarter.

·  As for the expected impacts of the proposed 2011 tax package, more than half (53%) of the panelists, especially those from the goods-producing sector, anticipate a favorable impact on their firm's sales. In contrast, a majority of the respondents (60%) said they do not anticipate any increase or decrease in investment spending or employment in response to new tax policies.

Manufacturing...A new shining star?

U.S. manufacturing, viewed as a lost cause by many Americans, has begun creating more jobs than it eliminates for the first time in more than a decade.

As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data show. That total will grow again this year, according to economists at IHS Global Insight and Moody's Analytics.
Among others, major auto makers—both domestic and transplants—are hiring. Ford Motor Co. announced last week it planned to add 7,000 workers over the next two years.
The economists' projections for this year—calling for a gain of about 2.5%, or 330,000 manufacturing jobs—won't come close to making up for the nearly six million lost since 1997. But manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years, these economists say.
After a steep slump during the recession, manufacturing is "the shining star of this recovery," says Thomas Runiewicz, an economist at IHS. He expects total U.S. manufacturing jobs this year to rise to about 12 million. Currently, manufacturing jobs account for about 9% of all U.S. nonfarm jobs; the average pay for those jobs is roughly $22 an hour, or nearly twice the average for service jobs, according to government data.

Source: WSJ, Moody’s Analytics

Alliance for American Manufacturing calls for access to capital and trade deficit reduction.

Industry Group Urges President Obama to Adopt Manufacturing Strategy in 'State of the Union' Agenda

As President Obama prepares to report to the nation on the State of the Union, the Alliance for American Manufacturing has sent a letter urging him to renew his focus on the challenges and opportunities facing American manufacturers and their workers. 

"American manufacturing is in crisis mode," said AAM Executive Director Scott Paul. "In his State of the Union address, we're asking the President to announce a comprehensive national manufacturing strategy that can revitalize our industrial base and ensure a wider economic recovery."

AAM's letter to the President outlines five key areas of a national manufacturing strategy that should be delineated in the State of the Union:

*Access to capital
*Creating demand and promoting manufacturing utilization
*Workforce development
*Competitiveness
*Trade deficit reduction

Read complete article at-

http://industryweek.com/articles/industry_group_urges_president_obama_to_adopt_manufacturing_strategy_in_state_of_the_union_agenda_23663.aspx

Corporate Tax Revisions on the Table

Talks on Corporate-Tax Revisions Set to Start.

One likely focus of the discussions will be finding ways to use an overhaul to encourage more investment in the U.S.

President Barack Obama pushed through a temporary tax break on new business equipment as a spur to investment in last month's tax deal that extended Bush-era income-tax levels.

But many experts believe more fundamental tax changes are needed to draw investment to the U.S. and strengthen the tepid recovery. That has led Mr. Obama and his top aides to consider embracing a corporate-tax overhaul as a major goal for the new Congress, where business-friendly Republicans have gained power. Recalibrating corporate taxes also could boost the administration's efforts to mend frayed relations with business leaders.

Several possible elements of a revised corporate-tax structure could encourage investment. A lower U.S. tax rate, for example, could reduce some incentives for U.S. companies to shift assets to lower-tax countries. Many corporate leaders want Washington to reverse its longstanding policy and let them bring back billions in overseas profits without being taxed in the U.S.

Finding any new tax breaks that can meet the administration's tough budgetary standards is likely to prove a struggle. Mr. Obama is insisting that changes to the corporate-tax code not add significantly to the government's already dire fiscal problems.

That means the budgetary cost of new tax benefits—including a lower rate—likely would have to be made up through elimination of other popular business breaks.

Finding "Real" Value

With the economy up in the air and the unknown looming upon the leasing industry, we have seen many leasing companies, brokers and funding sources rise and fall throughout the past few years. Most originators, who have found success over the last few years and more specifically over the past year, have gravitated to a specific niche or limited their efforts to a few industries. Vendors and end-users want to conduct business with financial partners who understand their specific industries, their specific challenges, and are able to speak their language. Brokers who try to be all things to all potential customers become experts in nothing and spend more time chasing miss-matched transactions than they spend funding transactions which are properly aligned with their capabilities. Originators who are focused are able to provide greater value to their stakeholders and are able to increase their personal incomes more quickly. There are no better or worse industries to focus one’s energies, the important factors are to choose an industry which you have an interest in, which you can develop funding capabilities and an industry which you have a passion to penetrate on multiple levels.
“Real” value is derived from knowledge and an originator’s ability to transform knowledge into quantified results. Every broker’s primary function is to prospect and to deliver superior services to his/her stakeholders. Superior service cannot be delivered unless the originator has knowledge which is otherwise in limited supply. Therefore, it must be an ongoing process to improve your knowledge in relationship to every aspect of the leasing/financing process. Some of the greatest attractions for entrepreneurs to enter our industry are the dynamics, the flexibility, and the creativity of our business. Along with these factors comes the responsibility of originators to embrace change; to be pro-active in innovating and providing new solutions to new challenges. The strongest brokers embrace a higher level of knowledge; they no longer chase transactions with the lowest common denominators, but are able to attract stronger vendors, stronger funders and stronger credit clients because of their ability to add “real” value to every transaction.
The future is bright for the best brokers and originators. The market craves expertise, knowledge and value-added services. Funders, vendors and end-users need our services now more than ever. Success will not be delivered to those originators who are not pro-active. However, for those originators who are willing to deliver superior service and are willing to aggressively pursue new relationships by providing “real” value, 2011 will provide an abundance of new opportunities.

Mazuma Capital  is committed to our client's success.  Our unique capabilities and innovative product offerings provide solutions accelerating financial growth.  Servicing rising companies, established companies, brokers and vendors, Mazuma continues to secure its position as the middle-market industry leader.

Source: World Leasing News

Banks In Need of Additional Reform

Economists are concerned that recent reform will not be enough to prevent the need for more bailouts.  In recent months, regulators around the world have taken steps to ensure that banks will be able to weather tough times. New international rules will require big global banks to hold more equity to protect their depositors and other creditors. In the U.S., lawmakers have adopted measures intended to mitigate risk at big banks and keep close tabs on potential threats throughout the financial system.

Over the past few days, though, economists here offered many reasons why the recent banking reforms fall short. Among their concerns: The new capital requirements aren't tough or simple enough, there is too much uncertainty about how governments will deal with distress at the biggest lenders. It seems that there has been little done to prevent the kind of crisis that could occur if trouble broke out at many smaller institutions, such as hedge funds.

Recent history suggests that a capital requirement of 7% won't be enough to fend off bailouts. Many banks that required government support during the latest crisis, including the Citigroup and Royal Bank of Scotland, whom both had capital levels exceeding 7% just before trouble hit in the third quarter of 2007.

Another issue is banks' excessive reliance on short-term borrowing to finance their activities. Tougher rules could push more financial activity away from banks into other areas that don't face the same regulations. The so-called shadow banking sector, which includes everything from hedge funds to derivative markets, already plays a larger role in credit markets than traditional banking.

New financial rules in the U.S. provide regulators with more power to oversee the shadow banking sector, and shed light on it by creating incentives to shift more derivatives trades into places where they can be monitored. But regulators have yet to work out exactly how they will identify dangerous situations in which many players have become exposed to similar risks.

Source: WSJ.com

*The capital equipment leasing sector offers attractive alternatives for those seeking finance options.  With tax incentives still available and many options to fit the financial goals of customers, leasing is something that is worth looking into for businesses of all sizes.  The economy has not been kind to businesses over the past few years.  There are many once profitable companies who are finding it harder and harder to secure financing, and banks can't look at the external factors that have left a mark on businesses. When seeking financing for new/used equipment many businesses look to Mazuma Capital.  A lease originator, Mazuma Capital is a funding source that works for businesses, promotes growth and profitability.

MOMENTUM BUILDS FOR CORPORATE-TAX OVERHAUL

The White House and congressional Republicans are moving from different directions toward a consensus that the U.S. corporate tax code needs a fundamental overhaul, a goal high on corporate leaders' agenda.

Specific proposals for retooling the complex corporate-tax system aren't on the table and the debate over the issue is sure to be lengthy and difficult. But President Barack Obama and Republican congressional leaders are separately sounding the same broad theme that corporate tax rates should be lower.

The movement on the corporate-tax issue comes as Mr. Obama and his aides are pushing a broad effort to repair relations with U.S. business leaders. Since Democrats lost control of the House in November, Mr. Obama has met with chief executives to solicit their ideas on job growth, negotiated a free-trade pact with South Korea widely supported by business, and begun searching for figures with strong ties to the business world to take top White House jobs.