Annual Capital Expenditures Survey

SUMMARY OF FINDINGS

General highlights

In 2007, U.S. nonfarm businesses invested $1.36 trillion in new and used structures and equipment, an increase of 3.9 percent from 2006.¹ (See Tables 1a and 1b)

Expenditures for new and used structures totaled $529.3 billion, an increase of $40.6 billion (8.3 percent) from 2006. (See Figure 1.) Of this amount, $484.1 billion (91.5 percent) was spent for new structures. Expenditures for new and used equipment totaled $832.3 billion in 2007, not statistically different² from 2006. Of this amount, $792.4 billion (95.2 percent) was spent for new equipment, an increase of $15.3 billion (2.0 percent) from 2006. Total spending on new structures and new equipment was $1.28 trillion, up $50.7 billion (4.1 percent) from 2006.

The Annual Capital Expenditures Survey collects data from companies with and without employees. Companies with employees accounted for $1.28 trillion (93.8 percent) of total capital spending in 2007, an increase of 5.0 percent from 2006. These companies invested $494.8 billion in structures, an increase of 9.0 percent from 2006, and $782.6 billion in equipment, an increase of 2.5 percent from 2006. (See Figure 2.)

Companies without employees accounted for $84.2 billion of capital spending in 2007, a decrease of $8.6 billion (9.3 percent) from 2006. In 2007, these companies spent $34.5 billion on structures and $49.7 billion on equipment.

Highlights by business sector and industry for companies with employees. (See Tables 2, 3, and 4)

(Data in this section are based on the 2002 North American Industry Classification System. Data are only for companies with employees because companies without employees are not asked to report capital expenditures by sector or industry.)

Of the 19 sectors covered in this report, 6 had a statistically significant increase in spending compared with 2006, 1 had a statistically significant decrease, and 12 showed no statistically significant change. (See Table A, below and Figure 3.)

Of the 135 industries covered in this report, 41 had a statistically significant increase in spending, 17 had a statistically significant decrease, and 77 showed no statistically significant change from the prior year.

Manufacturing. The manufacturing sector spent $197.0 billion on capital goods in 2007. Of the total spending by this sector, $42.7 billion was for structures and $154.2 billion was for equipment. (See Figure 4.)

Investment spending by durable goods manufacturers totaled $108.0 billion in 2007. Of this amount, $18.3 billion was for structures, while $89.7 billion was for equipment. The motor vehicle and parts industry was the largest durable goods investor, spending $19.4 billion in 2007, a decrease of 20.0 percent from 2006. The semiconductor industry was the second largest durable goods investor, at $14.9 billion in 2007, not statistically different from the prior year.

Nondurable goods manufacturers spent $89.0 billion on capital goods in 2007, not statistically different from 2006. Spending for structures was $24.4 billion, and spending for equipment was $64.5 billion. The top two contributors in this category were the petroleum and coal products industry at $16.8 billion, up 14.8 percent from 2006, and the food manufacturing industry at $16.5 billion, not statistically different from the prior year. A third industry, basic chemical, resin, synthetics, rubber, and fiber manufacturing, spent $11.6 billion in 2007, not statistically different from 2006.

Finance and insurance. The finance and insurance sector spent $172.5 billion on capital goods in 2007, an increase of 5.8 percent from 2006. Of this amount, $45.1 billion was for structures and $127.4 billion was for equipment. The leading industry spender in this sector was nondepository credit intermediation (e.g., sales and lease financing, and credit card issuing) at $92.2 billion, an increase of 3.6 percent from 2006.

Real estate and rental and leasing. This sector spent $123.0 billion on capital goods in 2007, not statistically different from the prior year. One of the two leading spenders in this sector was the automotive equipment rental and leasing industry at $48.3 billion, down 14.0 percent from 2006, with virtually all spent for equipment. The other leader, real estate, spent $47.4 billion in 2007, not statistically different from the prior year, with 89.2 percent of this amount spent for structures.

Mining. The mining sector spent $121.7 billion on capital goods in 2007, an increase of 22.6 percent from 2006. Spending for structures totaled $86.2 billion and spending for equipment totaled $35.5 billion. The oil and gas extraction industry at $94.0 billion (up 24.5 percent from 2006) accounted for 77.2 percent of the sector’s overall capital spending in 2007. The support activities for oil and gas operations industry spent $16.4 billion on capital goods in 2007, an increase of 24.5 percent from 2006.

Information. The information sector spent $105.3 billion on capital goods in 2007, not statistically different from the prior year. Of this spending, $28.6 billion was for structures and $76.7 billion was for equipment. The leading industry spenders in this sector were wired telecommunications carriers at $35.2 billion, an increase of 9.5 percent from 2006, wireless telecommunications carriers at $22.2 billion, down 20.5 percent from 2006, and cable and other program distribution, at $18.6 billion, an increase of 10.1 percent from 2006.

Retail trade. In 2007, capital spending by the retail trade sector was $84.2 billion in 2007, not statistically different from 2006. Of this spending, $41.8 billion was for structures and $42.4 billion was for equipment. The leading spender in this sector, other retail trade stores including gasoline stations, spent $27.9 billion in 2007, down 9.6 percent from 2006. The second leading spender, general merchandise stores, spent $19.4 billion in 2007, down 13.4 percent from the prior year.

Health care and social assistance. The health care and social assistance sector spent $83.8 billion for structures and equipment in 2007, up 11.2 percent from 2006. The leading contributor to overall spending in this sector was general medical and surgical hospitals at $48.8 billion, up 12.4 percent from 2006. The second largest contributor was the nursing and residential care facilities industry at $9.3 billion, not statistically different than the prior year.

Utilities. The utilities sector spent $83.6 billion on capital goods in 2007, an increase of 19.9 percent from 2006. Within this sector, the electric power generation, transmission, and distribution industry accounted for $72.2 billion, an increase of 20.3 percent from 2006, and 86.3 percent of the sector’s total capital spending. The natural gas distribution industry spent $8.6 billion on capital goods, up 21.9 percent from the prior year.

Transportation and warehousing. Total spending by this sector was $68.5 billion in 2007, not statistically different from the prior year. The sector’s top spender was the air transportation industry at $13.6 billion, up 51.2 percent from 2006. Other contributors included the rail transportation industry at $11.0 billion, up 15.4 percent from 2006, the pipeline transportation of natural gas industry at $10.6 billion, up 50.8 percent from the prior year, and the truck transportation industry at $10.6 billion, down 43.3 percent from 2006.

Accommodation and food services. This sector’s capital spending totaled $38.4 billion in 2007, not statistically different from 2006. The food services and drinking places industry accounted for $20.7 billion of this total, up 50.0 percent from 2006. The traveler accommodation services industry, which includes hotels and casino hotels, accounted for $17.8 billion, not statistically different from 2006.

Construction. The construction sector spent $36.7 billion for capital goods in 2007, up 21.4 percent from the prior year. The leading spender in this sector was the special trade contractors industry at $21.3 billion, up 50.9 percent from the prior year. The second leading spender was the heavy and civil engineering construction industry at $9.8 billion, not statistically different from the prior year.

Professional, scientific, and technical services. This sector spent $31.8 billion for capital goods in 2007, not statistically different than 2006. The largest contributor to the sector total was the computer systems design and related services industry at $7.4 billion, not statistically different from the prior year. The next two largest contributors were the scientific research and development services industry at $5.4 billion, not statistically different from the prior year, and the architectural, engineering, and related services industry at $5.3 billion, not statistically different from the prior year.

Wholesale trade. The wholesale trade sector spent $31.8 billion on capital goods in 2007, down 13.2 percent from 2006. Within the sector, the merchant wholesalers durable goods industry spent $17.6 billion, down 21.2 percent from the prior year. The merchant wholesalers nondurable goods industry spent $13.0 billion, not statistically different from 2006.

Other services (except public administration). This sector spent $29.5 billion on capital goods in 2007, not statistically different from 2006. The religious, grantmaking, social advocacy, civic, and social organizations industry was the sector’s largest spender at $17.5 billion, not statistically different from 2006.

Educational services. The educational services sector spent $23.2 billion on capital goods in 2007, not statistically different from the prior year.

Administrative and support and waste management. This sector spent $18.8 billion on capital goods in 2007, not statistically different from 2006. The office administrative, facilities, employment, and other support services industry, at $6.0 billion (not statistically different from the prior year), accounted for 31.9 percent of this sector’s total spending. The waste collection, treatment, and disposal industry, at $4.4 billion (not statistically different from 2006), accounted for 23.2 percent of the sector’s spending, and the investigation, security, and services to buildings industry, at $4.3 billion (not statistically different from 2006), accounted for 22.6 percent of this sector’s total spending.

Arts, entertainment, and recreation. This sector spent $18.8 billion on capital goods in 2007, not statistically different from 2006. The amusement, gambling, and recreation industry, which accounted for 59.8 percent of all capital expenditures in this sector, spent $11.2 billion, not statistically different from the prior year.

DISCLOSURE
In accordance with federal law governing census reports (Title 13 of the United States Code), no data are published that would disclose the identity or operations of company that provided information under a pledge of confidentiality. Disclosure limitation is the process for protecting the confidentiality of data. When the estimate for a specific data item cannot be shown without disclosing information for individual companies, the publication of that data item is suppressed. The process of suppression does not change the marginal totals, so the integrity of the data is not adversely affected.

ABBREVIATIONS AND SYMBOLS
The following abbreviations and symbols are used in this
publication:
– Represents zero.
(D) Withheld to avoid disclosing data for individual companies, data are included in higher level totals.
(NA) Not available.
(NS) Not statistically significant.
(X) Not applicable.
(Z) Less than half of unit shown.

¹ The 2006 estimate of $1.31 trillion presented in this year’s report reflects a $513 million upward revision from that reported in last year’s report. The present report compares business investment in 2007 and 2006. For an assessment of investment spending patterns over a longer period, see 2008 Spending Report: U.S. Capital Spending Patterns—1999-2006 at:http://www.census.gov/csd/ace/report/capitalspendingreport2008.pdf
² Estimated measures of sampling variability have been calculated for each estimate and are used to construct 90-percent confidence intervals (or ranges) for all estimates of change. If a range contains zero (0), then it is uncertain whether there was an increase or a decrease; that is, the change is not statistically significant, and the current estimate is not statistically different from the prior estimate at the 90-percent confidence level. See the "Reliability of the Estimates"; Section of the Sampling and Estimation Methodologies appendix for more information on confidence intervals and statistical significance.