Merrill Lynch's Steinberg Deconstructs Tech Buildup

Jan. 13, 2005
By John S. McClenahen The results are not as dramatic or controversial as some recent academic attempts to deconstruct history and literature. But Bruce Steinberg, chief economist at Merrill Lynch & Co., New York, has taken a look at the U.S. Commerce ...
ByJohn S. McClenahen The results are not as dramatic or controversial as some recent academic attempts to deconstruct history and literature. But Bruce Steinberg, chief economist at Merrill Lynch & Co., New York, has taken a look at the U.S. Commerce Dept.'s just-published revisions of GDP data and concluded that with the partial exception of telecom, overbuilding of capital stock is not the cause of the current capital spending slowdown. "Based on the revised data, growth of tech capital stock probably peaked at 12.5% in 1999 and slowed to 11% last year," relates Steinberg. But during the decade leading to the year 2000, the rate was 9% annually, at the bottom of its historical range. "That doesn't seem particularly overbuilt to us," quips Steinberg. This year, he figures, the rate will be about 8% as tech spending records its biggest decline ever. "And after this year's contraction in tech spending, even a relatively strong rebound will probably leave tech capital stock growing only about 7.5% in 2002," he predicts. Indeed, "by late next year tech spending may well have to make up for its prior weakness."

Popular Sponsored Recommendations

The Ultimate Ecommerce Excellence Checklist

Oct. 2, 2023
Scaling ecommerce operations is no easy task when your business is moving fast. Assess your current ecommerce maturity level and set optimization priorities with this practical...

Goodridge Boosts Productivity & Saves Costs by Moving to the Cloud!

Dec. 4, 2023
With Infor's cloud solutions, Goodridge has been able to greatly increase overall productivity, cost savings, data visibility, and automation. This case study discusses the many...

Navigating Disruption: A Leader’s Guide to Strategy Under Uncertainty

Nov. 1, 2023
AI, sustainability, digital--industrials are facing disruptive forces that are redefining what it takes to win. What got your company where it is today won’t get you where you...

What Is the Next Step in Your 3D Printing Strategy?

July 11, 2023
Cutting-edge 3D printing solutions let you explore more ideas, create working prototypes in hours and enable bridge manufacturing and mass customization.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!