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Business investments in equipment and software slowed in the last year, and the market looks like it will remain soft in 2020, according to an analysis the Equipment Leasing and Finance Foundation.

The report, issued at the end of last year, measured investments from October 2018 through October 2019.

“After robust growth in 2018, equipment and software investment slowed markedly over the course of 2019 and contracted in the third quarter as the effects of unresolved trade tensions and a slowing global economy took hold,” the report stated. “The U.S. manufacturing sector continues to face recession-like conditions, which will provide a weak jump-off point for both the U.S. economy and the equipment industry in 2020.”

The report notes that a strong labor market and consumer confidence should keep the broader economy “above water for the time being,” it said.

Last week, U.S. Senator Pat Toomey (R-Pa.) introduced the ALIGN Act, which would makes permanent the full and immediate expensing provision of the 2017 tax reform law.

The foundation report, meanwhile, also noted that demand for credit had weakened, and the economy decelerated over 2018 levels, though both remain healthy by historical standards.

As for individual industries in 2020, the predictions are mixed. The report said, software investment should remain strong, while investment in computers is likely to remain weak. Medical equipment investment is expected to strengthen, as will agriculture machinery. Boats, airplanes, truck, and mining and oilfield machinery is expected to remain week. Material handling equipment and such investments in all other industries are expected to remain moderate.

By now, the economic forces impacting industry are well known. The economy is strong, but political uncertainty, tariff’s and reduced economic activity with U.S. trading partners are headwinds that show few signs of abating, the report states.

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