Survey discloses U.S. companies plan to boost capital spending 5.4% in '94
WASHINGTON -- U.S. businesses don't plan to stop their spending spree on new plant and equipment next year.</br></br>The Commerce Department, in a survey conducted in October and November, found that companies expect to increase capital spending 5.4% in 1994 after a 7% rise this year. But adjusted for price changes -- most notably an anticipated continuing decline in computer prices -- spending is expected to increase 7% in 1994, after an 8.5% rise this year.</br></br>The survey gives the department's first glimpse at plant-and-equipment spending plans for next year. The anticipated 1993 total is essentially unchanged from the 7.1% increase companies said they expected three months earlier.</br></br>The department's quarterly surveys do a better job of revealing the mood of the business community than prophesying the future. Many economists agree there is a tendency for real capital spending to be higher than expected in good years and lower in bad years.</br></br>Brian Wesbury, chief economist for Griffin, Kubik, Stephens & Thompson, said "the economy has caught a tail wind and we're moving into '94 at a good clip." But he warned that companies aren't investing in expanded capacity as quickly as production is increasing, suggesting there could be production bottlenecks next year.