Equipment buys signal business-investment decline

The last year that overall capital spending declined was in 1991, but the market may very well be headed for the first business-investment contraction in 10 years during 2001. Capital spending for nonresidential building construction work remained strong through the first three months of this year. But spending for new machinery and equipment — about 80 percent of the business investment total, and a leading indicator of future nonresidential building and reconstruction work — has contracted at about a 3 percent annualized rate over the past six months.