DRI/WEFA: U.S. Business Investment Remains Weak

By John S. McClenahen Even as some economists figure that first-quarter U.S. GDP growth may be revised upward from 5.8%, one respected forecasting firm is speculating that business investment "could stay flat" for longer than expected. "Cash flow has been weak, investors are wary and overcapacity plagues many industries," notes Lexington, Mass.-based DRI/WEFA. True, nominal outlays for computers were up at nearly a 20% rate in this year's first calendar quarter, it acknowledges. But they remain close to 30% below their peak, emphasizes DRI/WEFA. Also on the downside, according to the forecasters: spending on communications equipment (they expect it to fall further) and automotive fleet sales (they don't foresee a pick up until this fall).

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