Indications are that the U.S. government is set to approve a massive tax cut. U.S. corporations are set to see their federal tax rate drop from 35% to 21%.
So, what’s going to happen with the difference?
One with a liberal mindset may think that it will go solely into the pockets of shareholders. But, logically, businesses reinvest in their growth, especially when the market is ripe for growth and demand is high.
For example, according to Yahoo Finance, FedEx is just one company that “has already indicated it will increase spending on its various logistics and delivery businesses with the windfall payout the tax cut will grant. This, in turn, could bolster fortunes for goods and services companies who supply FedEx. Longer-term, this would point toward growth not only on FedEx’s bottom line, but in GDP overall.”
And FedEx is far from the only company that will have more money to spend if/when the tax cut becomes a reality.
What does this have to do with procurement?
Well, if companies have more money to spend, procurement could get busier. Much busier.
Hold onto your hats. Procurement could be in for one wild ride in 2018!