Growing New Plants
The average age of US manufacturing plants peaked recently at levels we haven't seen since WWII. It has started to decline. We have noticed a similar trend in the age of equipment.
When this trend changed previously, as in 1945 and 1965, capital spending on new equipment and manufacturing upgrades remained elevated for over a decade.
Lowered corporate tax rates paired with immediate expensing of capital expenditures provide incentives to continue increasing spending on new plants and equipment. This could lengthen the current economic cycle. We believe our portfolio is positioned to benefit from this.
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