By Ben Berkowitz
February 25, 2012 5:49 PM EST
Anyone looking for more evidence of a strengthening U.S. economic recovery needs only to consider conglomerate Berkshire Hathaway, where businesses ranging from railroads and electric utilities to furniture and candy stores are racking up record profits.
Even though Berkshire's Warren Buffett says with emphasis that the housing market is still in a depression, he was as upbeat as ever this weekend about the rest of the dozens of businesses he owns.
"Though housing-related businesses remain in the emergency room, most other businesses have left the hospital with their health fully restored," Buffett said on Saturday in his closely watched annual letter to shareholders.
Berkshire's five largest non-insurance businesses, all of them industrial in some way, posted record profits last year and should do the same this year, he said, surpassing $10 billion in combined earnings.
That being the case, Berkshire broke its own records for capital spending in 2011 by a wide margin and expects to do so again in 2012 -- almost all of it domestically, even with the company's global footprint.
Follow us
"About 95 percent of these outlays were made in the U.S., a fact that may surprise those who believe our country lacks investment opportunities. We welcome projects abroad, but expect the overwhelming majority of Berkshire's future capital commitments to be in America."
There are other big investments on tap, too. Buffett said his home-furnishings retailer, Nebraska Furniture Mart, bought a 433-acre (175-hectare) parcel north of Dallas and will construct what it expects to be the highest volume store of its kind anywhere. He also forecast billions of dollars in spending on solar and wind energy projects.
Investors who have been with Buffett over the long term expected his optimism.
"That's not surprising," said Michael Yoshikami, CEO of Destination Wealth Management, in California, noting in particular Buffett's sense that the banking business is back in shape. "He's obviously a believer in the financial sector being a key to the overall economy."
SIGNS WORTH WATCHING
Buffett sounded a similar tone in 2011.
"I don't see how anybody can be other than enthused about this country," Buffett told Berkshire shareholders last year at the company's annual meeting, even as the country was in the middle of a crisis over its debt ceiling and credit ratings.
Nonetheless, at this delicate stage in the U.S. economic recovery, his words carry weight, partly because of his successes over the years and partly from the sheer size and scope of Berkshire, which employs more than 270,000 people in nearly 80 businesses.
That gives him a view into many of the same factors policymakers consider when they try to figure out what to do next with the sluggish economy.
Weekly Roundup: Asian Markets Fall On Weak China Data And Euro Zone Debt Concerns
The Pain In Spain: Bankia Bailout, 5 Credit-Rating Downgrades
US Stocks - Time To 'Sell In May And Go Away'?
Investors Love Rio: Why Foreign Companies Are Buying Into Brazil's Real EconomyWe value your privacy. Your email address will not be shared.
