Abstract
This IDC study examines the 4Q07 financial flows data for the nonfinancial corporate sector. The goal is to assess the current state of the financial accounts of the nonfinancial corporate sector and look at how the current crisis in the U.S. financial markets will impact that sector' s ability to fund investment projects in general and IT initiatives in particular.
"The resilience of the nonfinancial corporate sector and its potential to maintain and grow investments will determine the severity and the duration of a consumer-induced general economic downturn, says Anna Toncheva, a research manager in the Leading IT Indicators program. "The analysis of the corporate sector balance sheet reveals some emerging challenges to funding investment projects in 2008. However, the magnitude of any IT retrenchment should be smaller compared with overall gross private domestic investment."
Table of Contents
- Table of Contents
- IDC Opinion
- In This Study
- Situation Overview
- Is There a Need for Restructuring of the Nonfinancial Corporate Sector
- Figure: Corporate Restructuring Pressures in the Current Cycle, 4Q01-3Q07
- Increasing Reliance on Debt to Support Investment
- Figure: Nonresidential Investment Propped by Corporate Debt, 1990-2007
- Slowing Demand for Commercial and Industrial Loans
- Figure: Net Percentage of Domestic Respondents Reporting Stronger Demand for C&I Loans, 4Q91-1Q08
- Future Outlook
- Slowdown in Profitability
- Figure: Domestic Nonfinancial Corporate Business Before Tax Profits, 1Q90-4Q07
- Lower Operating Rates Erode Top- Line Growth
- Figure: Capacity Utilization Rates Change in Index, January 1999-February 2008
- Loss of Pricing Power Drags Down Bottom-Line Growth
- Figure: Loss of Pricing Power, February 2007-February 2008
- Declining Internal Funds and Increasing Leverage
- Figure: Nonfinancial Companies' Borrowing Requirements, 1Q90-4Q07
- Staggering Net Equity Withdrawals
- Figure: Increasing Leverage of U.S. Nonfinancial Corporations, 1Q00-4Q07
- Changing Credit Sources
- Essential Guidance
- Learn More
- Related Research
- Synopsis
