Office tech
Another quantum leap for the Internet is just around the corner:
Faster, cheaper broadband communications technology ... a new type of DSL (digital subscriber line) with 10 times the current DSL capacity. The new ADSL2+ lines and deployment of even faster fiber-optic cables will bring more small and midsize businesses into online commerce and supply networks. About 50% of smaller companies are now using DSL.

Protecting IT networks from crashes will get cheaper and easier in 2005. Microsoft will add a low-cost backup system for Windows servers. The system will capture data every few seconds instead of once a day.

When systems DO crash, small firms will find more help at hand. Tech-help franchises, such as Geeks On Call, Computer Troubleshooters, and Expetec are mushrooming. Big retailers want some of the action, too: Best Buy is staffing up with PC pros to offer service at its stores. And office product giant Office Depot is considering plunging in as well.

The economy
Signs of somewhat softer fourth-quarter GDP growth are apparent. Solid third-quarter figures mask a growing drain from energy. Business investment is up, but the pace is slowing. Consumer spending continues to climb, but more dollars are being shelled out for gasoline. With energy prices remaining high, October-December growth won’t top 3%.

Home sales will dip about 10% next year after another record this year. With 2004 sales of new and existing homes at 7.7 million, the decline next year will still leave home builders with strong demand.
As for prices, the national average will continue to edge up.
But some cities may see some slippage, after very strong surges in recent years: In California: San Francisco, Sacramento, Los Angeles, and San Diego. In Florida: Tampa, Fort Lauderdale, and Miami. Plus Phoenix, Las Vegas, New York City, and Newark, N.J. In Washington, D.C., strong population and job growth spells more gains. Nationwide ... an average 3% increase.

Financial services
Looking for a loan for your small business? Try a credit union.
Nearly 200 now offer credit backed by the Small Business Administration. And they aim to nab a bigger share of business lending by adding services such as credit cards and insurance to the already substantial attraction of low interest rates. More credit unions are also linking together to form widespread networks of branches and automated teller machines.

Banks are crying foul. They’re bringing a court challenge and pressing Congress to curb credit union expansion. Bankers point out that exemptions from federal taxes and the Community Reinvestment Act let credit unions lend at lower rates than banks. Efforts to get Congress to end those exemptions won’t fly. And Bush said no way.

Meanwhile, the largest credit unions are thriving. Membership in the top 10 associations has increased 7.5% over the past 12 months.

© 2004 The Kiplinger Washington Editors, Inc.