Inside.com: Capital expenditures expected to be smaller this year

Inside.com reports capital spending by U.S. manufacturers is forecast to increase by 1% this year, down from a 14.9% annual increase in 2023.

The U.S. Federal Reserve is keeping interest rates at a 23-year high, which is forcing many companies to slow down capital expenditures. Michigan-based Fullerton Tool Co. has delayed plans to spend $1 million upgrading the equipment it uses to make tools for the aerospace, automotive, and medical fields, Bloomberg reports. High borrowing costs are eroding small business optimism, which currently sits at levels seen during the height of the COVID-19 pandemic. About a quarter of respondents to the University of Michigan’s consumer sentiment survey expect an interest rate cut this year, down from 32% in April.