FOR IMMEDIATE RELEASE: THURSDAY, JAN. 24, 2008
Capital Spending Reaches All-Time High
Capital spending by U.S. nonfarm businesses reached an all-time high of $1.31 trillion in 2006, topping the $1.16 trillion in 2000 and $1.14 trillion in 2005.
These results come from the U.S. Census Bureau's Annual Capital Expenditures Survey: 2006, which measures business spending for new and used structures and equipment. The survey defines capital goods as business assets that have an expected useful life of more than a year and that are usually depreciated.
Spending on new structures and equipment accounted for almost $1.23 trillion, a 14.8 percent increase over 2005. Nearly 63 percent of this spending ($774.7 billion) went for equipment, with the rest ($450.9 billion) allocated to structures. Spending on used structures and equipment totaled $83.8 billion.
The Annual Capital Expenditures Survey collects data from businesses with and without employees, but only businesses with employees are asked to report by industry. Businesses with employees accounted for $1.22 trillion, or 92.9 percent of all capital investment, in 2006. Businesses without employees accounted for $92.8 billion.
Sector and industry highlights:
- The manufacturing sector spent $191 billion on capital goods in 2006, a 15.3 percent increase over 2005.
- Durable goods manufacturers accounted for $105 billion in capital spending in
2006. The two durable goods industries with the largest investments were motor vehicle and parts ($24.4 billion), and semiconductor and other electronic components ($14.9 billion).
- Nondurable goods manufacturers accounted for $86.1 billion in spending. The two nondurable goods industries with the highest spending were food manufacturing ($16.6 billion), and petroleum and coal products ($14.7 billion).
- After manufacturing, the two sectors accounting for the largest capital expenditures were finance and insurance ($169.4 billion), and real estate and rental and leasing ($122.4 billion). These totals represented annual increases of 5 percent and 18.9 percent, respectively.
- The information sector spent $104.6 billion on capital goods in 2006, an increase of 14.5 percent over 2005. One-third of capital spending in this sector went to structures and two-thirds to equipment.
- The mining sector spent $98.3 billion on capital goods in 2006, an increase of 47.3 percent over 2005. In 2006, the oil and gas extraction industry accounted for 76.3 percent of the mining sector's total capital spending. In contrast to the information sector, mining allocated roughly two-thirds (69.1 percent) of its capital spending to structures and roughly one-third (30.8 percent) to equipment.
- Of the 135 industries covered in the report, 54 had an increase in spending in 2006, 13 had a decrease, and 68 showed no significant change from the prior year.
This report compares business investment in 2006 and 2005. For an assessment of investment spending patterns for a longer period, see 2007 Spending Report: U.S. Capital Spending Patterns - 1999-2005 <http://www.census.gov/econ/aces/report/2007/capitalspendingreport2007.pdf>.
The estimates in this report are based on a stratified random sample of about 46,000 companies with employees and about 15,000 companies without employees. Responding firms account for about 74.6 percent of the total capital expenditures estimate.
Data in the report are subject to sampling variability as well as nonsampling errors. Sources of nonsampling error include errors of response, nonreporting and coverage. More details concerning survey design, methodology and data limitations are available in the full report, which is available online at <www.census.gov/econ/aces/>.