"Cash & Liquid Assets"
Nonfarm, Nonfinancial Corporate Business
Cash and other liquid assets on the balance sheets of nonfinancial businesses totaled a record $1.93 trillion at the end of the third quarter. This equated to 7.4 percent of their total assets, the highest share since 1959. Companies are stockpiling cash as a buffer against a potential future disruption to the financial sector that might hinder their ability to borrow. A wait-and-see attitude regarding the strength of the economy also is playing a role. When businesses feel more confident in the stability of the financial system and the durability of the recovery, they will begin to deploy these resources to buy new equipment and expand their payrolls. As that occurs, tenant demand for commercial real estate likely would increase from the very modest levels seen thus far in the recovery.