Bureau of the Census For Release 8:30 A.M. EST Charles Funk Thursday, February 23, 1995 Laurence Blumberg CB95-43 (301) 763-2542 IPS(95)-1 BUSINESS INVESTMENT AND PLANS 1993 To 1995 (All dollar figures in text are in current dollars) Summary U.S. businesses plan to invest nearly $593 billion for capital goods in 1995, according to estimates reported today by the Commerce Department's Bureau of the Census. This is an increase of 7 (+/- 4)(1) percent from 1994 and over 21 percent from 1993 levels. The spending data for 1994 and 1995 are based on information collected in the new semiannual Investment Plans Survey (IPS). The 1993 data are based on the Annual Capital Expenditures Survey (ACES)(2). Business investment represents domestic expenditures for depreciable capital assets such as buildings and other structures, and machinery and other equipment. Spending in 1994 was estimated at $556 billion and $489 billion in 1993. Industry details The manufacturing sector accounted for approximately 29 percent of planned spending for 1995, or about $173 billion. Both durable goods and nondurable goods sectors expect increases over 1994. The durable goods sector is expected to increase 28 percent in 1995 following a 15 percent increase the prior year. The nondurable goods sector plans an 11 percent increase in 1995 after relatively flat spending in 1994. The services sector accounted for about 19 percent of expected 1995 spending at $115 billion. This level is relatively unchanged from 1994. Within the sector, health services providers expect to increase spending nearly 10 percent from 1994. Combined, the wholesale and retail trade sectors account for about 12 percent of planned spending in 1995, consistent with prior years. Retail trade companies expect to spend $52 billion, about the same as 1994, but up over 26 percent from 1993. Public utilities, communication and transportation companies together estimate spending in 1995 at about $126 billion. About this survey A stratified simple random sample of 30 thousand nonfarm companies was selected from a universe of about 2 million companies with five or more paid employees. Survey questionnaires were mailed in November 1994. Preliminary estimates of 1993 expenditures were derived from ACES. A brief description of the statistical methodology follows. Each company selected in the sample was asked to provide data by industry activity. Expenditures by companies unable to allocate expenditures by activity were categorized as Not Distributed by Industry (NDI). For 1995 planned investment and 1994 estimated investment, the NDI was 3.9 percent and 5.5 percent of the total capital expenditures, respectively. For 1993 investment, the NDI was 0.3 percent of total capital expenditures. It can not be assumed that investment included in the NDI category would be distributed in proportion to the expenditures reported for specific industries. Investment for capital assets used in more than one of a company's industry activities, was categorized as Serving Multiple Industries. Estimates of expenditures were derived by adjusting sample weights associated with each company that reported total expenditures, to account for companies that did not report. Since a company may not have reported total expenditures for all three years, adjusted weights for a company may have differed for each year. Data reported by a company for a given year were multiplied by the company's adjusted weight for that year. Industry totals for a year were derived by summing these weighted values across companies reporting in the industry for the year. No adjustment was made for companies that reported total capital expenditures without industry detail. The data in this report are subject to sampling variability as well as nonsampling variability. Sources of nonsampling variability include errors of response, non-reporting, and coverage. Measures of sampling variability, presented as relative standard errors, are shown in the table. The response rate for 1995 planned expenditures and 1994 estimated expenditures, from the IPS, is 69 percent and 70 percent, respectively. The response rate for 1993 ACES was 92 percent. These rates are based on total capital expenditures reported in each survey. (1) The statement "7 (+/-4) percent increase," appearing in the text, indicates the range (+3 to +11 percent) in which the actual percent change is likely to have occurred. The range given for the percent change is a 90 percent confidence interval that accounts only for sampling variability. If the range had contained zero, it would have been uncertain whether there was an increase or decrease; that is, the change would not have been statistically significant. For any comparison cited without a confidence interval, the change is statistically significant. (2) Final results of the 1993 Annual Capital Expenditures Survey will be issued in May 1995. The publication will provide greater industry detail, and data on aggregate new and used expenditures for structures and for equipment. The data will include businesses with fewer than 5 employees. * * * This release is available electronically the day of the release through the Department of Commerce's Economic Bulletin Board (202-482-3870) and through the Census Bureau's online information service -- CENDATA. CENDATA is available from Dialog Information Services, Inc. (1-800-334-2564) and Compuserve (1-800-848-8199). The release is also available on Internet. For further information regarding electronic releases, call (301-457-1242). The next press release, containing revised 1995 plans, is scheduled for September 22, 1995 at 8:30 A.M. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BUSINESS INVESTMENT AND PLANS (Millions of Dollars) Industry Standard Plans Estimated Actual Description Industrial 1995 1994 1993p Classification (SIC) Code Total expenditures 592,896 556,291 489,072 Sum of expenditures: By industry 570,019 525,927 487,525 Not distributed by industry 22,877 30,364 1,547 Mining and construction 10-17 41,347 42,141 30,656 Manufacturing 173,209 144,145 134,014 Durable goods 24-25,32-39 97,446 76,084 66,335 Nondurable goods 20-23,26-31 75,763 68,062 67,678 Transportation 40-42,44-47 34,226 32,327 30,613 Communications 48 53,626 44,625 37,023 Utilities 37,731 37,975 41,258 Electric 491 20,867 21,029 21,029 Gas transmission,distribution, and other utilities 492-497 16,865 16,947 20,229 Wholesale and retail trade 72,774 68,129 60,240 Wholesale trade 50-51 20,420 16,590 18,854 Retail trade 52-59 52,354 51,539 41,387 Finance, insurance and real estate 40,306 36,870 40,226 Finance 60-62,67 22,806 22,243 25,986 Insurance and real estate 63-65 17,499 14,627 14,240 Services 115,419 118,506 111,771 Personal and business services, including agricultural services 07-09,70-79 57,540 62,759 57,379 Health services 80 33,982 30,760 30,849 Social, educational and other professional services 81-87,89 23,897 24,986 23,543 Expenditures serving multiple industries (X) 1,381 1,209 1,724 p Premliminary data from the 1993 Annual Capital Expenditures Survey. Final data are scheduled to be published in May 1995. (X) Not Applicable Questions concerning this report should be directed to Charles Funk or Laurence Blumberg on (800) 227-1735 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Relative Standard Errors by Business 1993 - 1995 (Percent) Industry Standard Plans Estimated Actual Description Industrial 1995 1994 1993p Classification (SIC) Code Total expenditures 3 3 1 Sum of expenditures: By industry 3 3 1 Not distributed by industry (X) (X) (X) Mining and construction 10-17 15 13 4 Manufacturing 5 4 2 Durable goods 24-25,32-39 9 6 2 Nondurable goods 20-23,26-31 4 4 2 Transportation 40-42,44-47 9 8 5 Communications 48 22 15 5 Utilities 4 4 1 Electric 491 7 6 2 Gas transmission,distribution and other utilities 492-497 5 5 2 Wholesale and retail trade 8 5 3 Wholesale trade 50-51 24 7 5 Retail trade 52-59 6 6 3 Finance,insurance and real estate 8 5 4 Finance 60-62,67 7 7 5 Insurance and real estate 63-65 15 9 6 Services 6 6 4 Personal and business services including agricultural services 07-09,70-79 11 10 7 Health services 80 4 4 2 Social, educational and other professional services 81-87,89 7 7 7 Expenditures serving multiple industries (X) 12 12 3 p Premliminary data from the 1993 Annual Capital Expenditures Survey. Final data are scheduled to be published in May 1995. (X) Not applicable Questions concerning this report should be directed to Charles Funk or Laurence Blumberg on (800) 227-1735