Business Growth to Be Half the ’84 Rate, U.S. Reports

American businesses are planning to boost spending on expansion and modernization in 1985 at less than half the rate of increase of last year, the government reported today.

The Commerce Department projected that the gain this year will be 7.3% after removing the effects of inflation. That compares to a 14.9% surge in 1984, the biggest gain in 18 years.

The jump in capital spending last year was a key force powering the country to its best year of overall growth in more than three decades. The economy, as measured by the gross national product, grew 6.8% in 1984, a feat unmatched since 8.3% growth in 1951.

Analysts have been expecting that capital spending will cool off somewhat this year and have revised their expectations of overall growth downward as well.

By industry, the Commerce Department survey found that manufacturing industries plan an 11% increase in spending, before adjusting for inflation.