Wednesday, January 23, 2008
Business spending will take a break
--Business investment in equipment and software -- which accounts for $1 in every $13 of spending in the U.S. economy -- could be the next leg of the economy to weaken, an unwelcome development at a time when housing and commercial real estate are sinking and consumer spending is slowing. --In the auto industry, the slowdown in business investment has been reflected in declining sales of heavy trucks, like 18-wheelers, and of light trucks, like sports-utility vehicles and pickup trucks. --In 2007, sales of medium and heavy trucks fell 23%, according to Ward's Automotive, a trade publication that tracks industry sales. Sales of pickup trucks, which are the bread-and-butter of the construction industry, declined 5.8% in 2007, according to Autodata Corp. --Technology is among the biggest business expenditures, and signs have been growing that tech spending growth will weaken this year. Forrester Research said it expects U.S. tech spending growth of 5.2% for 2008, down from 5.7% last year. Overall, as much as 18% of U.S. tech spending comes from financial companies, according to Forrester Research analyst Andy Bartels.