Consumer spending must slow to the growth rate of income. Public utilities are a special case. Deregulation has confused the industry, as it divides into transmission, generation, and distribution companies from the prior vertically integrated structure. Capacity is getting tight, but capital for investment is hard to find. We expect the capital to appear as the industry emerges into the deregulated world.
Investment is strong, but slowing.
Consumers are tapped out, and exports continue to slide because of the Asian recessions. Profits are being squeezed by the drop in exports to Asia and by the restraints on price increases, limiting internal funds available for investment. But the economy continues to expand, even though at a slower pace. Labor remains scarce and capital cheap. The result will be slower, but still very respectable, growth in electrical equipment sales domestically, but another year of decline in export sales.