Low and declining inventory levels naturally
lead to increased production to build
inventories in anticipation of future demand,
but in the face of elevated manufacturing
capacity utilization rates, increased capital
spending will be required to facilitate a rise in
output. Since our last capital spending
forecast in December 2005, significant
increases in spending for 2006 have been
announced. suggesting growth in capital
expenditures of about 10 percent this year.
Andrew N o mood
au orEH0_ca'.'
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