Increased business spending will provide a healthy kick to the economy in 2011. Although companies have already restocked inventories depleted during the recession, investment in equipment and software is likely to match last year’s gain of about 15%. At the same time, spending on buildings will level off, following a three-year steep decline.

Credit a souped-up tax break approved by Congress in early December for some of the increase on equipment spending. Lawmakers OK’d a provision that allows businesses to expense 100% of the cost of assets put into use this year. Of course, some of that spending will be “borrowed” from next year -- moved forward to take advantage of the tax break and therefore reducing growth in 2012 spending.

Although conditions are improving in construction, high vacancy rates for offices, industrial space and retailing will keep a lid on spending for the year. Demand for new space won’t rise until job growth increases substantially, not likely until next year.

Durable goods orders fell in December, reflecting a slower pace in business spending growth in the second half of 2010 than in the first half. Most of the decline came from civilian aircraft. Orders for machinery and motor vehicles were strong, but most sectors were flat or down, including computers and electrical equipment.

Increased business spending will provide a healthy kick to the economy in 2011. Although companies have already restocked inventories depleted during the recession, investment in equipment and software is likely to match last year’s gain of about 15%. At the same time, spending on buildings will level off, following a three-year steep decline.

Credit a souped-up tax break approved by Congress in early December for some of the increase on equipment spending. Lawmakers OK’d a provision that allows businesses to expense 100% of the cost of assets put into use this year. Of course, some of that spending will be “borrowed” from next year -- moved forward to take advantage of the tax break and therefore reducing growth in 2012 spending.

Although conditions are improving in construction, high vacancy rates for offices, industrial space and retailing will keep a lid on spending for the year. Demand for new space won’t rise until job growth increases substantially, not likely until next year.

Durable goods orders fell in December, reflecting a slower pace in business spending growth in the second half of 2010 than in the first half. Most of the decline came from civilian aircraft. Orders for machinery and motor vehicles were strong, but most sectors were flat or down, including computers and electrical equipment.

Increased business spending will provide a healthy kick to the economy in 2011. Although companies have already restocked inventories depleted during the recession, investment in equipment and software is likely to match last year’s gain of about 15%. At the same time, spending on buildings will level off, following a three-year steep decline.

Credit a souped-up tax break approved by Congress in early December for some of the increase on equipment spending. Lawmakers OK’d a provision that allows businesses to expense 100% of the cost of assets put into use this year. Of course, some of that spending will be “borrowed” from next year -- moved forward to take advantage of the tax break and therefore reducing growth in 2012 spending.

Although conditions are improving in construction, high vacancy rates for offices, industrial space and retailing will keep a lid on spending for the year. Demand for new space won’t rise until job growth increases substantially, not likely until next year.

Durable goods orders fell in December, reflecting a slower pace in business spending growth in the second half of 2010 than in the first half. Most of the decline came from civilian aircraft. Orders for machinery and motor vehicles were strong, but most sectors were flat or down, including computers and electrical equipment.