U.S. businesses with five or more employees invested $549.3 billion for new and used capital goods in 1994, up 12.2 percent over 1993. Purchases of new structures and equipment accounted for $513.8 billion (93.5 percent of total expenditures). Expenditures for structures alone were $168.1 billion, with $155.3 billion (92.4 percent) for new structures.2 Spending for equipment was $376.3 billion, with $358.5 billion (95.3 percent) for new equipment. U.S. businesses were unable to allocate $4.8 billion in spending to structures or equipment, new or used. Although total expenditures over all business sectors were divided 68.5 percent for equipment and 30.6 percent for structures, the Mining; Insurance and Real Estate; Health Services; and Membership Organizations, Educational, and Miscellaneous Services sectors spent more for structures than equipment. The chart below shows total capital expenditures by selected business sectors.

• Tables

Highlights of capital expenditures by business sector

Manufacturing

This sector led in investments for capital goods by spending $154.4 billion (28.1 percent of total expenditures). Of this amount, $31.5 billion (20.4 percent) was for structures and $121.9 billion (79 percent) was for equipment. Manufacturing industries spent $116.3 billion on new equipment, nearly one-third of total new equipment purchases. Investment spending was divided fairly evenly between the Durable Goods and the Nondurable Goods industries, $79.7 billion and $74.7 billion, respectively. Among the Durable Goods industries, the Motor Vehicles and Parts industry led other industries by spending $18 billion. Second in spending was the Communications Equipment and Electronic Components industry with $14.6 billion. Among the Nondurable Goods industries, the Food Products industry spent $13.4 billion and the Chemical Products industry spent $13.1 billion.

Services

This sector followed manufacturing in investments for capital goods by spending $123.8 billion (22.5 percent of total capital expenditures). Of this amount, $40.6 billion (32.8 percent) was for structures and $82.4 billion (66.6 percent) was for equipment. Rental and Business Services accounted for $67 billion (54.1 percent), or slightly more than half of Services expenditures. The Automotive and Truck Rental and Leasing industry was the largest contributor to this sector, spending $27.6 billion. The second largest Services component was Health Services, where the Hospitals industry accounted for $21.3 billion of the $31.8 billion spent by the Health Services sector. The remainder of expenditures was by Membership Organizations, Educational, and Miscellaneous Services.

Mining

This sector spent $24.6 billion (4.5 percent of total capital expenditures) for capital goods. The Crude Petroleum, Natural Gas, and Natural Gas Liquids industry led other industries in this sector by spending $16.7 billion.

Transportation

This sector spent $33.3 billion (6.1 percent of total capital expenditures) for capital goods. Leading this sector in the purchase of capital goods was the Motor Freight Transportation andWarehousing industry, which spent $12.9 billion.

Insurance and Real Estate

This sector spent $17.4 billion (3.2 percent of total capital expenditures) for capital goods, including $10.4 billion for structures. x Construction. This sector had the highest percentage of its spending for equipment purchases. Total spending for capital goods was $9.1 billion (1.7 percent of total capital expenditures), of which $8.4 billion (92.3 percent) was for equipment. This sector also purchased the largest amount of used equipment as a percentage of industry purchases, spending $1.3 billion (14.3 percent of total expenditures for Construction).

Communications

Nearly all spending in this sector was for new capital goods. Total spending was $41.9 billion (7.6 percent of total capital expenditures), of which $40.7 billion (97.1 percent) was for new structures and equipment.

Retail Trade

This sector divided expenditures almost evenly between structures and equipment. Of the $46.5 billion (8.5 percent of total capital expenditures) spent for capital goods, $21.3 billion was for structures and $24.9 billion was for equipment.

Highlights of detailed capital expenditures by structure type

Commercial

Expenditures for commercial buildings led other structure types with $58.5 billion (35.3 percent of total structures expenditures by industry and type). Spending for office and professional buildings was $19.4 billion, about the same as for stores, shopping centers, and restaurants. The Retail sector led other business sectors by spending $20.9 billion (35.7 percent) for commercial buildings.

Industrial

Spending for industrial buildings was second with $30.2 billion (18.2 percent of total structures expenditures by industry and type). The Manufacturing sector accounted for $25.5 billion (84.4 percent of total spending for industrial buildings) while the Mining sector spent $3 billion.

Utilities

Businesses invested $25.3 billion (15.3 percent of total structures expenditures by industry and type) for utilities structures. The largest components were power plants, which accounted for $12.3 billion (48.6 percent of total spending for utilities), and communications structures, which accounted for $5.6 billion. The Utilities industry spent $18.5 billion and the Communications industry spent $5.6 billion to account for virtually all utilities structures investment.

Other Buildings

Spending for other buildings was $25 billion (15.1 percent of total structures expenditures by industry and type). The Services sector spent $24.7 billion (98.8 percent of total spending on other buildings). $13.7 billion of the total spending on other buildings was for hospitals and medical buildings and $6.3 billion was for educational buildings.

Mine Shafts and Wells

Businesses invested $12.1 billion (7.3 percent of total structures expenditures by industry and type) for mine shafts and wells. Petroleum and natural gas wells accounted for $8.3 billion of this group.

Highlights of detailed capital expenditures by classification of construction

Most construction work was performed by outside contractors. Of the $147.6 billion in construction work reported, $125.5 billion (85 percent) was performed by contractors and $22.1 billion (15 percent) by company employees. Slightly more than half of contract construction, or $70.6 billion (56.3 percent), was for new construction and the remaining $54.9 billion (43.7 percent) was for remodeling. Company employees accounted for $13.5 billion of the work on transportation and utilities structures. Approximately half of the construction on buildings of these two structure types was performed by company employees compared with the 15 percent average for all structure types combined.

Construction of New Facility

Spending for construction of new facilities was $82.9 billion (50 percent of total structures expenditures by industry and type). Of this amount, $70.6 billion (85.2 percent) was performed by contract employees and $12.3 billion by company employees.

Remodeling, Renovation, and Modernization of Existing Facility

Remodeling, renovation, and modernization spending was second with $64.7 billion (39 percent of total structures expenditures by industry and type). Of this amount, $54.9 billion (84.9 percent) was performed by contract employees and $9.8 billion by company employees. Note: All reconstruction type expenditures are classified as new structures expenditures in table 3.

Acquisition of Existing Facility

Companies spent $12.7 billion (7.7 percent of total structures expenditures by industry and type) acquiring used facilities and $5.4 billion (3.3 percent of total structures spending) acquiring new facilities. Commercial buildings were acquired more frequently than other building types, accounting for $9.3 billion (51.4 percent of total acquisitions).

The following table displays how structures expenditures were allocated for the five types of structures for which spending was the greatest. These five structure types account for 84.3 percent of structures expenditures that were specified by type of structure.

Most of the spending for commercial structures was split between remodeling and renovation and construction of new facilities. While all other structure types were at 40 percent or less in expenditures for remodeling, 44 percent of expenditures went to remodeling of commercial structures. Similarly, 16 percent of commercial structure expenditures were in the acquisition of existing facilities, while other structure types were at 12 percent or less. On the other hand, only 41 percent of expenditures for commercial structures went to new construction, while no other structure type was less than 50 percent.

Most of the spending for mine shafts and wells (77 percent) and utilities (63 percent) was for construction of new facilities. About half of spending for hospital and medical facilities and industrial structures was for new facilities.