Business Investment To Recover Slowly, Analysts Say

By John S. McClenahen Economic recession in the U.S. may be ending less than a year after it began. But business investment "will recover slowly," says DRI/WEFA, a Lexington, Mass.-based economic forecasting firm. Its analysts believe an uptick in spending for computers and software will come first, followed, in 2003, by investment in communications gear. "Industrial investment will be the last to come back," they predict. In an interesting sidelight, DRI/WEFA notes that as a share of U.S. GDP, spending on equipment and software has now fallen from 10% to 8.5%, "considerably higher than the average of the previous 40 years." The story on investment in structures is quite different, however. It's fallen below 3% of GDP, after averaging 4% from 1960 to 1990, DRI/WEFA figures.

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