Equipment Spending Expected To Accelerate

By John S. McClenahen The word "boom" is not being used. But Global Insight, a Waltham, Mass. economic forecasting firm, expects business spending on equipment, which posted a substantial increase in this year's third calendar quarter, to gain more momentum during the next few quarters. "Improving cash flow, bonus depreciation and attractive prices on capital goods are loosening business purse strings," its economists observe. Inflation-adjusted spending on computers, for example, should increase at nearly a 40% annual rate this quarter, after rising at a 46% annual rate in the third quarter. Adds Global Insight, "We expect nominal spending on computers by business to be back to $95 billion [annual rate] by mid-2004. That was the peak level of spending before the tech bubble burst."

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