U.S. businesses spent $264.2 billion on information and communication technology (ICT) equipment and computer software in 2007, a 4.4 percent increase over 2006, according to the U.S. Census Bureau.

     Each year, the Census Bureau publishes sector-level data from its Information and Communication Technology Survey for noncapitalized and capitalized spending as a supplement to the Annual Capital Expenditures Survey. Noncapitalized expenditures are written off in the same year in which they are made, while capitalized expenditures are usually depreciated over time.

     Noncapitalized expenditures made up 35.7 percent, or $94.4 billion, of spending on ICT equipment. Capitalized spending accounted for 64.3 percent of total spending, or $169.8 billion, a 5.9 percent increase from 2006.

     Among noncapitalized expenditures, purchases of ICT equipment accounted for $20.2 billion (21.4 percent), an increase of 7.0 percent from 2006; operating leases and rental payments accounted for $17.8 billion (18.8 percent); and computer software expenditures accounted for $56.4 billion (59.7 percent).

     Of total capitalized spending in 2007, purchases of ICT equipment accounted for $106.5 billion, an increase of 5.3 percent from 2006. Capitalized purchases and payroll for developing software accounted for $63.3 billion, an increase of 6.8 percent from 2006.

     Sector highlights:

• Information — Spending in this sector totaled $63.8 billion, or 24.1 percent of total ICT expenditures. Noncapitalized spending saw a 10.5 percent decrease from 2006, while capitalized expenditures increased 4.1 percent over the same period.
• Finance and insurance — Spending in this sector totaled $52.5 billion, or 19.9 percent of total ICT spending in 2007. Capitalized spending at $29.1 billion increased 6.4 percent from 2006.
• Manufacturing — Spending in this sector reached $36.2 billion, representing 13.7 percent of total ICT spending for 2007. Noncapitalized expenditures were $17.7 billion, an increase of 2.5 percent over 2006. Capital expenditures were $18.5 billion.
• Professional, scientific, and technical services — In 2007, spending in this sector totaled $24.9 billion, or 9.4 percent of total ICT spending. Noncapitalized expenditures were $11.3 billion. Capitalized expenditures were $13.6 billion.
• Health care and social assistance — This sector spent $21.4 billion, representing 8.1 percent of total ICT spending. Capitalized expenditures reached $14.5 billion, a 10.9 percent increase from 2006.

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The estimates in this report are based on a stratified random sample of about 47,800 companies with employees. Responding firms account for about 89.8 percent of the total e-business infrastructure spending 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 provided in the full report, which is available online at <www.census.gov/csd/ict/>.