Appeared on September 2, 2008
Digging into the processes and the trends that have developed during this run-up in commodity prices, you can find one area that is a clear lagging subject to higher inputs. That area is the other portion of input costs, capital equipment and IT spending. A s the leash on producers’ necks starts to loosen, they will find themselves able to fund those delayed and abandoned projects and end-of-cycle replacements that are needed but have been impractical during this cycle. I would look for companies that have been hurt by lower capital spending and weak consumer spending to rebound fairly well, but a little after the first sprint of front-line commodity users.