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Machine Tool Blog - CNC Machine Tools Blog
Please do your tax planning early. Have your year end meetings with your accountant now. Yes they may extend section 179 tax benefits to cover equipment purchases in 2012. Saving available for 2011 should be evaluated now before they are lost forever. Equipment deliveries are running 8 to 10 weeks on most of our product lines. If you need to have equipment on the floor by December 31 place your order now. Don’t depend on what may or may not be in inventory.
Manufacturing activity picked up pace in June after falling off sharply in May amid high energy prices.
The manufacturing index rose to 55.3 percent in June from 53.5 percent in May, the 23rd straight month of expansion as the sector drives the sluggish economic recovery, the Institute for Supply Management, a trade group of purchasing executives, reported on Friday.
A reading above 50 indicates that the manufacturing sector is expanding. 
In June, new orders for goods and employment increased modestly, with employment showing continued strength with an increase of 1.7 percentage points to 59.9 percent, the ISM report showed.
The rate of increase in prices slowed for the second consecutive month, dropping 8.5 percentage points in June to 68 percent after a 9 percentage point drop in May the lowest figure since August 2010 when the index registered 61.5 percent.
“While the rate of price increases has slowed and the list of commodities up in price has shortened, commodity and input prices continue to be a concern across several industries,” the report said.
Of the 18 manufacturing industries, 12 reported growth in June, led by miscellaneous manufacturing, printing, computer and electronic products as well as paper products and textile mills.
Heading into the Independence Day weekend, the markets got a boost from the manufacturing data, which exceeded economists’ estimates.
If you have been in the market looking for equipment you may have been surprised to find that out that some delivery dates can be four to six months from the time you place the order. While that is definitely a problem it is only the beginning as our good friend Uncle Sam will dramatically reduce the tax benefits available on equipment after 12/31/11.
A) The Section 179 deduction will drop from $500,000 in 2011 to an estimated $125,000 in 2012 and the total capital acquisition cap will drop from $2,000,000 in 2011 to $500,000 in 2012.
B) The 100% Bonus Deprecation in 2011 will drop to 50% in 2012
Below is an example of the effect these changes could have on you company!
First Quarter 2011 CEO Economic Outlook Survey Index
The CEOs of America’s leading companies anticipate higher sales and plan to increase capital expenditures and employment over the next six months, according to the results of Business Roundtable’s first quarter 2011 CEO Economic Outlook Survey.
The Business Roundtable CEO Economic Outlook Survey Index increased to 113 in the first quarter of 2011, up from 101 in the fourth quarter of 2010.
Business Roundtable’s CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economy by Business Roundtable member CEOs.
Manufacturing in the U.S. expanded in March at close to the fastest pace in almost seven years, reinforcing signs the industry will propel growth in the world’s largest economy.
The Institute for Supply Management’s manufacturing index was little changed at 61.2, after February’s 61.4 reading that was the highest since May 2004, the Tempe, Arizona-based group’s report showed today. Figures greater than 50 signal expansion.
Companies like Caterpillar Inc. (CAT) and United Technologies Corp. (UTX) are benefiting as production, fueled by inventory rebuilding at the start of the recovery, gets an added boost from rising demand in the U.S. and overseas. The strength in manufacturing is also generating job gains, a necessary ingredient to a sustained expansion.
“Manufacturing is doing very well,” said Nigel Gault, chief U.S. economist at IHS Global Insight Inc. in Lexington, Massachusetts. “It’s the leading sector in the economy.”
Stocks extended gains after the figures, with the Standard & Poor’s 500 Index rising 0.7 percent to 1,334.69 at 10:47 a.m. in New York. Treasuries were little changed from late yesterday, with the yield on the benchmark 10-year note at 3.47 percent.
The median forecast of 79 economists surveyed by Bloomberg News was 61.1. Estimates ranged from 59 to 63.
A gauge of factories in the euro region dropped to 57.5 last month from February’s 59, London-based Markit Economics said. Manufacturing in China, India and Russia also expanded.
China’s manufacturing growth accelerated for the first time in four months with the index rising to 53.4 from 52.2, while India’s manufacturing grew for a 24th straight month and the index remained at 57.9. Russia’s factory output gauge increased to 55.6, the highest in almost five years, from 55.2.
Earlier, the Labor Department reported that the U.S. economy added 216,000 jobs in March, while the unemployment rate declined to 8.8 percent, signs the labor-market recovery is gathering speed.
The ISM’s production index increased to 69, the highest since January 2004, from 66.3. The new orders measure fell to 63.3 from 68, and the gauge of export orders decreased to 56 from 62.5.
The employment gauge slipped to 63 from 64.5 in the prior month.
The index of prices paid jumped to 85, the highest since July 2008, from 82. A measure of supplier deliveries increased to a one-year high of 63.1 in March, indicating longer lead times.
The measure of orders waiting to be filled fell to 52.5 from 59. The inventory index eased to 47.4 from 48.8, while a gauge of customer stockpiles was little changed at 39.5 from 40. A figure lower than 50 means manufacturers are reducing stockpiles.
Recent regional factory reports underscore the resilience of the manufacturing industry, which accounts for about 11 percent of the economy. The Federal Reserve Bank of Philadelphia’s index indicated factories expanded in March at the fastest pace since 1984, while the New York Fed’s measure rose to a nine-month high.
United Technologies, the maker of Pratt & Whitney jet- engines and Otis elevators, is among companies benefiting from growth in the so-called BRIC countries that include Brazil, Russia, India and China. The Hartford, Connecticut-based company in March boosted the low end of its 2011 earnings forecast amid improving markets across its divisions.
Peoria, Illinois-based Caterpillar, the world’s largest maker of construction equipment, is seeing a “slow, steady increase” in demand in North America, Chief Executive Officer Doug Oberhelman said at an industry conference on March 23. “Business is booming outside the U.S.,” Oberhelman said.
Auto dealers are also seeing improved demand. Car sales in February rose to a 13.38 million unit pace, the highest since the government’s cash-for-clunkers program in August 2009, according to industry data.
To contact the reporter on this story: Shobhana Chandra in Washington atschandra1@bloomberg.net
Caldwell Machinery is happy to announce the our premier financing program on our LVD Strippit, KSI Swiss, Hansvedt EDM, ONA EDM, and Jet Edge Water Jet Equipment.
Purchase equipment from one of our premier equipment lines and you will be eligible for our premier financing program.
Machine Cost – $189,900.00
Lease Term – 60 months
Down Payment – $ 9,495.00
Payment #2 – #3 – $ 0.00
Payment #4 – #6 – $ 1,899.00
Payment #7 – #60 – $ 3,894.00
Regular Payment #7 is due 180 days after delivery and acceptance!
Purchase Option – $ 1.00
$500,000 Write-off on Machine Tools
100% Bonus Depreciation
2011 Machine Tool Tax Savings
That is a picture of $52,500.00. That is the potential monies you could save if you take advantage of Section 179. Please take time to review the example below if you are considering purchasing a new Machine Tool or even if you already have already purchased new equipment for your company. The example is based on $150K Machine Tool purchase. The tax savings in this example were $52,500, a nice pile of cash.
Savings can be Significant! Don’t miss this opportunity!
Questions? Call TD Equipment Finance and Leasing. 877-920-9407
| Tax Savings Example – Section 179 Deduction | ||||
| Cost of Equipment: | $ 150,000.00 | |||
| Section 179 Deduction: | $ 150,000.00 | |||
| 50% Bonus Depreciation: | $ – | |||
| Regular First Year Depreciation Deduction: | $ – | |||
| Total First Year Deduction: | $ 150,000.00 | |||
| Cash Savings on your Equipment Purchase: | $ 52,500.00 | |||
| (Assuming a 35% Tax Bracket) | ||||
| Lowered Cost of Equipment after Tax Savings | $ 97,500.00 | |||
