Bureau of the Census For Release 8:30 A.M. EST Charles Funk Thursday, March 28, 1996 Irving Copeland CB96-50 (301) 763-2542 IPS(96)-1 Notice: Due to budget reductions, the Investment Plans Survey is terminated with the release of today's data. BUSINESS INVESTMENT AND PLANS 1994 to 1996 (All dollar figures in text are in current dollars) Summary U.S. businesses plan to invest about $603 billion for capital goods in 1996, according to estimates reported today by the Commerce Department's Bureau of the Census. This is an increase of 1.5 (+/- 0.8) (1) percent from 1995 and nearly 10 percent above 1994 levels. The spending data for 1995 and 1996 are based on information collected in the semiannual Invest- ment Plans Survey (IPS). The 1994 data are based on the Annual Capital Expenditures Survey (ACES) (2). Business investment represents domestic expenditures for depreciable capital assets such as buildings and other structures, and machinery and other equipment. Spending in 1995 was estimated at $594 billion and $550 billion in 1994. Industry details The manufacturing sector accounted for approximately 31 percent of planned spending for 1996, or about $185 billion. The durable goods sector is expected to increase 10 percent in 1996 following a 16 percent increase the prior year. The nondurable goods sector plans a 5 percent increase in 1996 following a 9 percent increase in 1995. The services sector accounted for about 21 percent of expected 1996 spending at $129 billion, a 5 percent increase from 1995. Health service providers expect to increase spending 11 percent from 1995, while personal and business services providers expect to spend $67 billion, about the same as 1995. Increases in 1996 spending for the manufacturing and services sectors are partially offset by decreases in other sectors. Combined, the wholesale and retail trade sectors, which account for 12 percent of planned spending in 1996, expect to spend $72 billion, down 4 percent from 1995. This follows a 9 percent increase of the 1995 level over that for 1994. Mining and construction, transportation, and public utilities companies together plan to spend $109 billion in 1996, down from $116 billion in 1995. About this survey A stratified simple random sample of 30 thousand nonfarm companies was selected from a universe of about 2 million companies with five or more paid employees. Investment Plans Survey (IPS) questionnaires were mailed in November 1995 to collect 1995 and 1996 data. Estimates of 1994 expenditures were derived from the Annual Capital Expenditures Survey (ACES). A brief description of the statistical methodology follows. Each company selected in the sample was asked to provide data by industry activity. Expenditures by companies unable to allocate expenditures by activity were categorized as Not Distributed by Industry (NDI). For 1996 planned investment and 1995 estimated investment, the NDI was 0.4 percent and 0.5 percent of the total capital expenditures, respectively. For 1994 investment, the NDI was 0.4 percent of total capital expenditures. It can not be assumed that investment included in the NDI category would be distributed in proportion to the expenditures reported for specific industries. Investment for capital assets used in more than one of a company's industry activities was categorized as Serving Multiple Industries. Estimates of expenditures were derived by adjusting sample weights associ- ated with each company that reported total expenditures, to account for companies that did not report. Since a company may not have reported total expenditures for all three years, adjusted weights for a company may have differed for each year. Data reported by a company for a given year were multiplied by the company's adjusted weight for that year. Industry totals for a year were derived by summing these weighted values across companies reporting in the industry for the year. No adjustment was made for companies that reported total capital expenditures without industry detail. The data in this report are subject to sampling variability as well as nonsampling variability. Sources of nonsampling variability include errors of response, non-reporting, and coverage. Measures of sampling variability, presented as relative standard errors, are shown in the table. The response rate for 1996 planned expenditures and 1995 esti- mated expenditures, from the IPS, is 71 percent and 74 percent, respec- tively. The response rate for 1994 ACES was 90 percent. These rates are based on total capital expenditures reported in each survey. (1) The statement "1.5 (+/- 0.8) percent increase," appearing in the text, indicates the range (0.7 to 2.3 percent) in which the actual percent change is likely to have occurred. The range given for the percent change is a 90 percent confidence interval that accounts only for samp- ling variability. If the range had contained zero, it would have been uncertain whether there was an increase or decrease; that is, the change would not have been statistically significant. For any comparison cited without a confidence interval, the change is statistically significant. (2) Final results of the 1994 Annual Capital Expenditures Survey will be issued this summer. The publication will provide greater industry detail, and data on aggregate new and used expenditures for structures and for equipment. The data will include additional detail on expenditures by type of structure. * * * * * * * * * * * * * * * * Electronic Access of Data: This release is available electronically the day of the release through the Department of Commerce's Economic Bulletin Board (202-482-3870) and through the Census Bureau's online information service -- CENDATA. CENDATA is available from Dialog Information Ser- vices, Inc. (1-800-334-2564) and Compuserve (1-800-848-8199). The release is also available on the Internet at this address: (https://www.census.gov/ftp/pub/econ/www/mu2300.html). For further infor- mation regarding electronic releases, call (301-457-1242). * * * * * * * * * * * * * * * * Business Investment and Plans (Millions of Dollars) Industry Standard Capital Expenditures for: Description Industrial Classification Plans (SIC) Code 1996 1995 (1) 1994 (2) --------------------------------------------------------------------------- Total expenditures 603,395 594,465 549,912 Sum of expenditures : By industry 600,701 591,680 547,762 Not distributed by industry 2,694 2,785 2,150 Mining and construction 10-17 33,565 35,985 36,061 Manufacturing 184,786 172,308 153,338 Durable goods 24-25,32-39 100,151 91,381 78,898 Nondurable goods 20-23,26-31 84,634 80,927 74,440 Transportation 40-42,44-47 35,171 37,021 33,344 Communications 48 46,319 46,040 41,547 Utilities 40,599 42,816 42,173 Electric 491 18,932 21,410 23,513 Gas transmission, distribution, and other utilities 492-497 21,667 21,405 18,660 Wholesale and retail trade 71,855 75,093 68,853 Wholesale trade 50-51 19,654 21,851 23,269 Retail trade 52-59 52,202 53,242 45,584 Finance, insurance, and real estate 57,655 57,260 46,787 Finance 60-62,67 34,581 30,971 29,823 Insurance and real estate 63-65 23,074 26,289 16,964 Services 129,429 123,696 123,487 Personal and business services including agricultural services 07-09,70-79 67,429 68,406 66,220 Health services 80 34,758 31,291 31,177 Social, educational, and other professional services 81-87,89 27,243 23,999 26,089 Expenditures serving multiple industries (X) 1,321 1,462 2,172 (1) Final results will be available upon the release of the 1995 Annual Capital Expenditures Survey. (2) Final results of the 1994 Annual Capital Expenditures Survey will be issued this summer. * * * * * * * * * * * * * * * * Relative Standard Errors (Percent) Industry Standard Description Industrial Classification Plans (SIC) Code 1996 1995 1994 ------------------------------------------------------------------------- Total expenditures 1 1 1 Sum of expenditures : By industry 1 1 1 Not distributed by industry (X) (X) (X) Mining and construction 10-17 5 4 5 Manufacturing 1 1 1 Durable goods 24-25,32-39 2 2 2 Nondurable goods 20-23,26-31 2 2 2 Transportation 40-42,44-47 3 4 5 Communications 48 1 1 2 Utilities 4 4 3 Electric 491 2 6 5 Gas transmission, distribution, and other utilities 492-497 7 4 3 Wholesale and retail trade 3 3 4 Wholesale trade 50-51 6 7 11 Retail trade 52-59 4 4 3 Finance, insurance, and real estate 5 6 3 Finance 60-62,67 1 2 1 Insurance and real estate 63-65 12 12 9 Services 3 2 2 Personal and business services including agricultural services 07-09,70-79 2 2 2 Health services 80 4 3 2 Social, educational, and other professional services 81-87,89 13 6 7 Expenditures serving multiple industries (X) 0 0 12 (1) Final results will be available upon the release of the 1995 Annual Capital Expenditures Survey. (2) Final results of the 1994 Annual Capital Expenditures Survey will be issued this summer. (X) Not available (Z) Less than one percent