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Area Development

Taking the Long View

Nov 09
As the year draws to a close, news on the economic front has been somewhat positive. According to Commerce Department reports, U.S. GDP grew in the third quarter of 2009 for the first time in a year, reflecting an annualized rate of 3.5 percent.

Economists note that this growth indicates the recession actually ended in the year's second quarter, brought about by an increase in consumer spending, residential investment, and strong government spending as a result of the Stimulus Plan. The White House Council of Economic Advisers further noted that President Obama's Stimulus Plan added more than 2 percent to real GDP growth for the July-September period.

Importantly, U.S. manufacturing activity also increased in October at the fastest pace in more than three years. The Institute of Supply Management's manufacturing index registered 55.7 in October, up from 52.6 in September - and the third monthly reading above 50, which indicates growth.

And, for the first time in almost two years, companies increased their outlays for "software and equipment" during 2009's third quarter. Albeit the rate of spending growth was just 1.1 percent, but "equipment and software" is a broad and important category that includes not only computers and software but also medical equipment, industrial engines, autos, planes, furniture, farm machinery, etc. Investment strategists are being so bold to predict that business spending on capital equipment will reflect an annualized rate of about 10 percent for the year's final quarter. All of this increase in demand for their products should lead businesses to hire more workers, but - as we know - that hasn't happened yet.

Nonetheless, more than half of the company executives surveyed this summer by Deloitte feel the U.S. economy will begin to rebound by the first half of 2010, and the consulting firm advised companies to stop focusing on short-term concerns and plan instead for "talent, growth, and structural change so that their business doesn't just survive - it thrives." That being said, our 2010 Corporate Location Directory - and the ancillary information found on CorporateLocationDirectory.com - will be invaluable to those companies that follow this advice, take a longer view, and begin to make new site and facility plans.

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