Executives at electric car marker Tesla, drug maker Novartis and retailer Bed Bath and Beyond are cutting spending or jobs while others are shelving projects or deals as inflation rages and confidence in the world economy wanes.
"The overarching concern that corporations have right now is how much will the economy slow down, and can we avoid a recession," said Art Hogan, chief market strategist at National Securities in New York. In response, the retailer said it is cutting capital expenditures by about 25 per cent and put on hold plans to remodel and build new stores.South Korean battery maker LG Energy Solution Ltd, a major supplier to US carmakers including Tesla, is reassessing a US$1.3-billion investment in an Arizona factory citing"unprecedented" economic conditions, a plan that was unveiled only three months ago.
More companies are also increasingly finding it difficult to pass rising costs for raw materials and labor to customers as inflation stubbornly sticks to the highest level in decades. "As consumers become more concerned about the economic reality, the first thing they tend to do is eat more at home," Chief Executive Jeff Harmening said.Walgreens Boots Alliance on Tuesday shelved plans to sell its UK high street pharmacy chain blaming global financial market conditions which meant potential buyers were struggling to borrow enough money.