Here's Allan Robinson's At The Bell which you'll find in Friday's newspaper:

Capital spending by U.S. corporations is on the decline and that was the stimulus investors had been hoping would help offset the weakness in consumer spending.

The durable goods orders scheduled for release today are forecast to have declined 0.3 per cent during June, compared with May's unchanged level, according to a survey of economists by Bloomberg. Excluding transportation, orders are forecast to have fallen 0.2 per cent in June, compared with the 0.8 per cent drop in May.

The weakness in the aircraft and automotive industries will only worsen the outlook as will the slump in business confidence and the high input costs, economists say.

One of the stalwarts of the capital spending cycle until early this year has been Boeing Co., but the aerospace outlook remains questionable as the world's airlines cut capacity and try to conserve cash. Oppenheimer & Co. Inc., for example, which rates Boeing as “market perform,” has slashed its share price target this year to $80 (U.S.) from $113.

“Uncertain revenues and soaring costs mean businesses will be reeling in their [capital expenditure] outlays over the next 18 months,” said Sheryl King and Drew Matus, economists with Merrill Lynch & Co. Inc. “We expect capital expenditures to be down 2 per cent in the [second] half of 2008 and to be down 5 per cent in 2009.”

While a short-term slowdown seems probable, in the longer-term U.S. industries must face the equipment replacement cycle – especially for exporters, which sell a broad range of products, said Bill Cheney, chief economist for MFC Global Investment Management, an arm of Manulife Financial Corp.

“In general most of the markets we sell into seem healthy,” he said. “On a global scale, the steel market seems healthy and chunks of U.S. industry like Caterpillar Inc. and Deere & Co. are doing well globally.”

There has not been an excessive level of capital spending since the early 2000 downturn, which resulted from overinvestment in the technology sector, Mr. Cheney said. “In the short-run, I would have to think the sluggish economic growth is going to weigh on business investment and cause companies to put things off,” Mr. Cheney said. But that should prove temporary. “It seems implausible that we can go along so long and so cheap on reinvestment.”