U.S. businesses invested $762.3 billion for new and used capital goods in 1996, an increase of 4.3 percent from 1995. Spending on new structures and equipment accounted for $703.7 billion or 92 percent of total expenditures. Expenditures for structures totaled $242.0 billion, with $221.1 billion for new structures. Spending for equipment was $520.3 billion, with $482.6 billion for new equipment. Businesses with 5 or more employees invested $642.9 billion in new and used capital goods, up 7.0 percent from 1995. Spending by these businesses accounted for 84 percent of total capital expenditures by all businesses. This year, for the first time, the survey divided spending between businesses with employees and nonemployer businesses. Businesses with one or more employees spent $662.4 billion, 87 percent of capital expenditures for all businesses, for new and used structures and equipment in 1996. New structures and equipment accounted for $627.7 billion. Expenditures for structures alone were $202.9 billion, with $189.4 billion for new structures. Spending for equipment was $459.5 billion, with $438.4 billion for new equipment.

Nonemployer businesses, which numbered 15 million in the most recent economic census, spent $100.0 billion or 13 percent of total expenditures for all businesses on capital goods in 1996. About three-fourths of that or $76 billion went for new structures and equipment. Expenditures for structures totaled $39.1 billion, with $31.7 billion or 81 percent for new structures. Spending for equipment totaled $60.9 billion, with $44.2 billion or 73 percent for new equipment.

Overall, businesses spent more for equipment than structures. Total expenditures were divided: 68 percent for equipment and 32 percent for structures. Some industries, however, spent more on structures than on equipment.Crude Petroleum, Railroad Transportation, Real Estate Offices, Hotels, Hospitals, and Educational Services spent significantly more on structures.

• Tables

Highlights of Capital Expenditures by Business Sector for Businesses With Five or More Employees

U.S. businesses with five or more employees invested $642.9 billion for capital goods in 1996, 95 percent of which went for new structures and equipment. The following table displays capital expenditures data and percent changes from 1995 to 1996 for business sectors where the change was statistically significant.

Manufacturing

This sector led in expenditures for capital goods by spending $191.2 billion, or 30 percent of total expenditures by all businesses with 5 or more employees. Of this amount, $37.4 billion was for structures and $153.8 billion was for equipment. Manufacturing industries spent $147.6 billion on new equipment.

Investment spending for Durable Goods totaled $109.7 billion, with $105.4 billion for new structures and equipment. The Motor Vehicles and Parts industry accounted for $17.7 billion of new capital expenditures, a 12.2 percent increase from 1995. Conversely, the Steel Works, Blast Furnaces, and Rolling Mills industry, at $4.1 billion, had a decrease in new capital expenditures of 10.8 percent in 1996, following an increase in 1995 of 45.5 percent.

Nondurable Goods manufacturers spent $81.5 billion on capital goods, $77.8 billion was for new structures and equipment.Among Nondurable Goods, Chemical Products (Excluding Drugs), at $19.0 billion, and Food Products (Excluding Beverages), at $13.1 billion, together accounted for 41 percent of total 1996 nondurable new capital expenditures. Tobacco Products, at $0.8 billion, had the largest percent increase from 1995 for capital goods, up 53.4 percent.

Services

This sector accounted for $142.0 billion or 22 percent of total capital expenditures by businesses with 5 or more employees. Of this amount, $50.1 billion was for structures and $91.8 billion was for equipment. Within this sector, industry groups leading in new capital expenditureswere Automotive and Truck Rental and Leasing, at $28.7 billion; Hospitals, at $21.3 billion; and Hotels and Other Lodging Places Including Casino Hotels, at $9.8 billion. Hotels and Other Lodging Places Including Casino Hotels had a 51.8 percent increase in new equipment and nearly doubled spending on new structures in 1996 compared with 1995.

Communications

The Communications sector invested $57.1 billion, virtually all of which was for new structures and equipment. This was a 23.6 percent increase in new spending from 1995, and followed an increase of 11.6 percent the previous year. New spending for Telephone and Other Communications Services increased 26.7 percent in 1996. Radio and Television Broadcasting Stations, which includes cable television services, had a 9.7 percent increase in 1996 in new spending, following an 80.8 percent increase in 1995.

Utilities

Utility companies spent $37.0 billion for capital goods in 1996. The $35.8 billion that went for new capital goods was 3.2 percent less than in 1995, and followed a 5.3 percent decline the prior year. Electric and Gas Services contributed $25.5 billion or 69 percent of the sector’s spending in 1996; Gas, Water, and Other Utilities accounted for the remaining $11.5 billion.

Transportation

This sector spent $35.9 billion for capital goods, 88 percent of which was for new spending. Railroad Transportation invested $6.5 billion for new capital goods, up 27.2 percent from 1995, following a 6.2 percent decrease the prior year.Air Transportation continued to increase new spending, up 23.4 percent to $8.6 billion in 1996, following a 6.9 percent increase in 1995.

Finance

This sector had $36.3 billion in capital expenditures in 1996, $34.8 billion going for new structures and equipment. This was an increase of 21.4 percent from 1995. Nondepository Credit Institutions and Commercial Banks accounted for 72 percent of the 1996 Finance sector new spending, increasing 42.4 and 10.4 percent, respectively, from 1995. Expenditures by the other industries in the Finance sector were not statistically different from 1995.

Mining

This sector spent $29.5 billion on capital goods in 1996. The Crude Petroleum, Natural Gas, and Natural Gas Liquids industry spent $20.0 billion, about three-fourths of the sector total.

Insurance and Real Estate

This sector spent $22.4 billion for capital goods. Real Estate Offices spent $9.5 billion for new structures. The insurance industries together spent $9.0 billion, of which $5.9 billion went for new equipment.

Construction

This sector spent $11.7 billion for capital goods in 1996, an increase of 12.6 percent. Of this amount, $9.4 billion was for new structures and equipment.

Note:

Sampling is used to collect the data presented in this report. Thus, the data are subject to sampling variability as well as reporting and coverage errors. All data comparisons shown above are statistically significant.