Growth spurt for economy at end of 2010. Five clues to what's next.
3. Business spending poised to leap
Business spending slowed at year's end, but it may well pick up this year.
One reason for the slowdown is a bottleneck in producing farm equipment, says Mr. Sohn. “People are on a waiting list for farm combines,” he says. “In some cases, there are enough tractor bodies, but they can’t get the huge tires.”
The main reason for the boom in spending at places like Deere & Co: Corn and wheat prices are high. “Every farmer wants to replace his equipment,” says Sohn.
Other business spending is expected to revive as a result of the tax package Congress passed at year's end, which allows businesses to write off 100 percent of investments made this year.
Rachelle Bernstein, tax counsel at the National Retail Federation in Washington, says she has received a lot of calls from retailers who are considering remodeling their stores as a result of the tax change. “We see a lot of investment coming from retail,” she says.