WASHINGTON — Businesses plan to increase capital spending 6.2% this year--a less ambitious pace than had been projected earlier, the Commerce Department reported Tuesday.
The department based that finding on a survey conducted in April and May. A similar survey for January through March indicated that 1985 spending for expansion and modernization would increase 7.3% over 1984. In both instances, figures were adjusted to discount the expected effects of inflation. Analysts said the slowdown was not surprising considering the deterioration in the economy this year.
"Businesses have been very pessimistic in the last few months," said Michael K. Evans, president of Evans Economics.
No Big Surprise
He added: "Businesses have started to pull in their horns, especially in the manufacturing sector because of the perceived threat of foreign competition. So I would say the decline is right in line with what economists in general were expecting."
The new figures are less than half of the 14.9% capital spending surge recorded in 1984--the biggest gain in 18 years--that came as the economy grew a strong 6.8%. In the first quarter of this year, the economy grew at an annual rate of only 0.7%.