The ins and outs of capital spending

by Dan Malovany
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With the uncertainty in the economy — both nationally and globally — many bakers and allied vendors may be wondering what bodes in the year ahead and even beyond for capital investment. In Baking & Snack’s exclusive annual survey on capital spending and equipment trends, the mood remains overtly optimistic, according to Marjorie Hellmer, president of Cypress Research Associates, which conducted the research.

Over the next two years, more than half (51%) of the executives surveyed stated their companies plan to hike capital spending — including adding equipment as well as maintaining, sustaining, remodeling and expanding operations — while nearly one-third (31%) will keep it the same as in 2015. But perhaps the most significant statistical trend might be an unexpected one: It involves the unusually low per cent that reported a planned “decrease” in spending over the next 24 months. Such a small projected reduction in spending plans translates into a huge positive indicator suggesting that the outlook for spending and the health of the industry remains strong through 2017.

“Only 5% are predicting a decrease in spending,” Ms. Hellmer reported. “We also have 13% who are unsure. But for such a low proportion of generally conservative bakers to anticipate decrease over the next two years — that is very positive.”

For more information on capital spending and equipment trends, check out the February issue of Baking & Snack magazine.

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