Congressional tax stalemate affecting manufacturing.
The Congressional stalemate over taxes has created a ripple effect, leading many companies to postpone production, upgrades, and hiring.
Nelson D. Schwartz at the New York Times reports that these companies fear their economic growth will be undermined should Congress’s failure to act lead to tax increases.
Schwartz says Shelton, Conn.-based Hubbell, Inc., an electrical manufacturer has:
Canceled several million dollars’ worth of equipment orders and delayed long-planned factory upgrades in the last few months, said Timothy H. Powers, the company’s chief executive. It has also held off hiring workers for about 100 positions that would otherwise have been filled, he said.
'The fiscal cliff is the primary driver of uncertainty, and a person in my position is going to make a decision to postpone hiring and investments,” Mr. Powers said. “We can see it in our order patterns, and customers are delaying. We don’t have to get to the edge of the cliff before the damage is done.'
Hubbell is not alone. Schwartz spoke to Vincent Reinhart, chief United States economist at Morgan Stanley.
More than 40 percent of companies surveyed by Morgan Stanley in July cited the fiscal cliff as a major reason for their spending restraint, Mr. Reinhart said. He expects that portion to rise when the poll is repeated this month.
Read more here.
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