FOR IMMEDIATE RELEASE
FRIDAY, FEB. 23, 2007

• Mike Bergman
• Public Information Office
• (301) 763-3030/457-3762 (fax)
• (301) 457-1037 (TDD)
• e-mail: <pio@census.gov>

• CB07-29

Capital Spending Up 10 Percent, Reaches $1.1 Trillion

    Businesses invested $1.15 trillion in new and used structures and equipment in 2005, the largest increase since 2000, the U.S. Census Bureau reported today.

    The 2005 level surpassed the 2004 total of $1.04 trillion by 10 percent, according to the Annual Capital Expenditures: 2005 [PDF] report, based on the Annual Capital Expenditures Survey (ACES).

    Spending on new structures and equipment accounted for almost $1.07 trillion or 93.2 percent of the 2005 total. Nearly two-thirds of this spending ($702.2 billion) went for new equipment, with the rest ($365.7 billion) allocated to new structures.

    These and other findings are included in the report, which defines capital goods as business assets that have an expected use of more than one year and are usually depreciated. The report shows estimates of investment by all nonfarm businesses, including businesses with and without employees.

    In 2005, businesses with employees accounted for 92.8 percent ($1.06 trillion) of all capital investment. Only businesses with employees were asked to report by industry. Among these businesses:

• Manufacturing led all sectors, investing $165.2 billion — an increase of 5.5 percent over 2004. About 80 percent of this total ($131.5 billion) went for equipment, the rest for structures.
  • Durable goods manufacturers invested $92.4 billion, while nondurable goods manufacturers invested $72.8 billion.

  • The motor vehicle and parts industry, at $23.5 billion, was the largest durable goods investor.

  • The food manufacturing industry, at $14.3 billion, was the largest nondurable goods investor.

• Among sectors with the fastest growth in capital spending, the accommodation and food services sector spent $31.5 billion, up from $20.6 billion in 2004 — an increase of 52.5 percent.

• The information sector spent $91.3 billion on capital goods, an increase of 9.3 percent from 2004. Wireless telecommunications carriers, up 13.9 percent to $27.3 billion, and wired telecommunications carriers, up 10.8 percent to $27.1 billion, led this sector’s spending.

• In 2005, spending by businesses with employees showed an increase in 42 industries, a decrease in six industries and no statistically significant change from 2004 in 87 industries.

    The ACES report shows capital investment for 135 separate industry categories based on the 2002 North American Industry Classification System. In addition to structures and equipment, the report also covers spending on furniture, computers and vehicles.

-X-

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/csd/ace/>.