FOR IMMEDIATE RELEASE WEDNESDAY, JANUARY 29, 2003 Patricia Buscher CB03-26 Public Information Office (301) 763-3030/457-3670 (fax) (301) 457-1037 (TDD) email: pio@census.gov Business Investment Drops 4 Percent, Census Bureau Reports U.S. businesses invested $1.1 trillion in new and used capital goods in 2001, a 4 percent decrease from the previous year, the Commerce Department's Census Bureau reported today. This follows an average increase of 10 percent in each of the previous three years. "A decrease in equipment spending was the main reason for this decline," said Census Bureau project manager Charles Funk. "Overall, businesses spent $748 billion on equipment in 2001, and that was down 6 percent from 2000." The decline in business investment for 2001 was the first decrease since the survey began nine years ago, Funk said. The report, Annual Capital Expenditures: 2001 [PDF 3.7M], defines capital goods as business assets with an expected use of more than one year, which generally are depreciated. Spending on structures, $362 billion, was about the same as the prior year. Nearly $1 trillion, or 94 percent, of all business investment was for new equipment and structures, with more than twice as much being spent on new equipment as on new structures. Expenditures on used equipment and structures made up the rest. Businesses with employees accounted for 95 percent ($1 trillion) of all capital investment in 2001. Spending by these companies decreased 3 percent overall, with 47 industries showing a decrease in spending, 19 increasing their spending and 64 spending about the same as the prior year. Businesses without employees invested $57 billion in capital goods, down 20 percent from the prior year. Other findings (see attached chart [PDF 40.K]):The report from the Annual Capital Expenditures Survey, shows detailed capital investment spending for 130 separate industry categories. It covers spending on buildings and other structures, machinery and equipment, furniture, computers and vehicles. Data in the report are subject to sampling variability, as well as nonsampling error. Sources of nonsampling error include errors of response, nonreporting and coverage. Further details concerning survey design, methodology and data limitations are available in the full report. -X-
- Manufacturing businesses with employees led all industry sectors by spending $192 billion on capital goods, down 10 percent, after a 9 percent increase in 2000. The motor vehicle and parts industry, the largest durable goods investor, spent $24 billion on capital expenditures, down 19 percent, after an increase of 18 percent in 2000. While spending by most nondurable goods industries declined, spending by the food and pharmaceutical and medicine industries increased about 14 percent each.
- The information sector invested $146 billion in capital expenditures, down 9 percent, following an increase of 30 percent the prior year. The wired telecommunications carriers industry led this sector's spending with $74 billion. Wireless carriers followed, spending $24 billion. Most of the spending decrease in this sector was attributable to telecommunication resellers, satellite and other telecommunications, down 45 percent, to $7 billion; and information services, down 61 percent, to $3 billion.
- The finance and insurance sector spent $131 billion on capital expenditures, about the same as in 2000. The leading industry spender in this sector was nondepository credit intermediation (e.g., sales and lease financing, and credit card-issuing companies) at $80 billion, down 3 percent.
- The utilities sector's capital expenditures totaled $83 billion, up 35 percent, following a 43 percent increase the prior year. Nearly $74 billion was spent by the electric power generators and distributors industry. Up 41 percent in 2001 and 52 percent in 2000, this industry's capital spending made up virtually all of the 2001 and 2000 increases for the utilities sector.
- The mining sector invested $51 billion in capital expenditures, up 20 percent in 2001, after a 39 percent increase in 2000. The oil and gas extraction industry led this sector's capital goods spending with $40 billion. This industry made up nearly all of the sector's increases in 2001 and 2000, up 24 percent and 57 percent, respectively.
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