WASHINGTON — U.S. businesses plan to increase investment spending a modest 1.4% this year, even weaker growth than previously believed, the government reported Thursday.
The Commerce Department estimated that spending by businesses for expansion and modernization will total $387.9 billion for all of 1987, after removing the effects of inflation.
The new estimate for spending this year is based on an industry survey completed in August. It represents a downward revision from a May survey that showed businesses planning to boost investment in new plants and equipment by 2.8% this year.
The downward revision came from cutbacks in spending in non-manufacturing industries, which offset stronger increases in manufacturing.
The projected 1.4% spending increase would follow an actual decline of 2.6% in spending during 1986.
The 1986 decline in business investment was the first setback since 1983, when spending had declined 1.1% following an even bigger 7.9% drop in 1982, during the depths of the last recession.