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cent over the four quarters of 1999, while real business spending on softwareincreased about 13 percent, and real spending on other information processingequipment (which includes communications equipment) increased 18percent. As in the previous year, the brisk pace of computer-related investmentresulted in part from the updating and replacement of older systems inpreparation for the century date change (better known as the year-2000 orY2K problem). Investment in transportation equipment also showed solidgains; however, other categories of equipment investment were nearly flat.Real spending on nonresidential structures declined about 5 percent overthe four quarters of 1999, as growth in earlier years (4.8 percent in 1997and 2.9 percent in 1998) appears to have satisfied demand for new spacefor a while.Business inventories increased modestly through the first half of 1999. Thepace of inventory accumulation strengthened in the third quarter. However,brisk sales brought inventory stocks down to lean levels relative to salesthrough the first three quarters of 1999 (Chart 2-4). Toward the end of theyear, businesses apparently built up inventory stocks in anticipation of potentialY2K disruptions, but sales continued to keep pace.For the decade of the 1990s as a whole, the overall inventory-to-sales ratioshowed a downward trend. This ratio for the manufacturing sector was fallingfor most of the decade, and more recently the retail inventory-to-sales ratioalso has fallen. This downward trend in inventories is likely related to theadoption of just-in-time inventory management as well as to the use of newChapter 2 | 55