P.M. BRIEFING : Capital Spending at 3-Year Low

American businesses are planning to increase spending on plants and equipment by 7.6% in 1990, the lowest increase in three years, the Commerce Department said today.

The slowdown reflects the sluggish economy, especially in the auto industry and related fabricated metals business where capital spending is expected to fall off during the year.

“There’s no reason to expect vibrant capital spending this year,” said Robert Dederick, chief economist at Northern Trust in Chicago. “This is going to be a year of subdued growth.

“The capital spending boom is becoming tired,” Dederick said. “It’s been a long one. It began in 1987. It’s being dragged down by the decline in corporate profits.”

Healthy capital spending growth, however, is expected in the non-manufacturing sector of the U.S. economy.

A report by the department’s Census Bureau estimated that real spending--capital spending adjusted to remove inflation--will total $503 billion vs. $468 billion in 1989, an increase of 8.6% over the previous year.