U.S. businesses invested $870.2 billion in capital goods in 1997, an increase of 7.8 percent from 1996. The 1996 estimate of $807.1 billion includes an upward revision of $45 billion, most of which is for equipment acquired then leased to others under operating leases, not previously reported. Spending on buildings and other structures in 1997 totaled $272.7 billion, while spending for equipment was $597.6 billion.

The approximately 6 million businesses with one or more employees accounted for 89 percent of 1997 investment spending at $770.8 billion. Investment in structures and equipment was up about 15 and 6 percent, respectively, from 1996. Investment in structures amounted to $235.5 billion and for equipment $535.3 billion. While spending increases were widespread across industries, the manufacturing sector, which accounts for about a quarter of all investment, was virtually unchanged from 1996.

Spending in 1997 by the approximately 16 million nonemployer businesses was $99.4 billion, about the same as in 1996. Nonemployer firms spent proportionately more for used structures and equipment, about 24 percent of their total spending, compared to employer businesses which invested only about 4 percent in used capital goods. Spending by industry is not available for nonemployer firms.

• Tables

Highlights of Capital Expenditures by Business Sector for Businesses with one or more Employees

Manufacturing

This sector led in expenditures for capital goods by spending $192.3 billion, or 24.9 percent of total expenditures by all businesses with one or more employees. Of this amount, $38.4 billion was for structures and $153.9 billion was for equipment.

Durable goods manufacturers spent $108.3 billion, or 56.3 percent of the manufacturing total. While there was no significant change at the total durables level from 1996, specific industries showed offsetting increases and decreases. About a fourth of the spending in durable goods was by communications and electronic components manufacturers at $27.7 billion. The second largest spender, motor vehicles and parts manufacturers, accounted for $18.3 billion, with industrial and commercial machinery manufacturers third at $13.4 billion.

Nondurable goods manufacturers spent $83.9 billion on capital goods. Chemical products (excluding drugs) at $19.9 billion and food products (excluding beverages) at $14.3 billion, together accounted for more than 40 percent of total 1997 nondurable capital expenditures. In the nondurable goods sector, the largest percentage increases in spending from 1996 were leather and leather products (45.9 percent), printing and publishing (except commercial) (31.9 percent), textile mill products (22.6 percent), and beverages (18.1 percent).

Services

This sector accounted for $165.1 billion or 21.4 percent of total capital expenditures by businesses with one or more employees. Of the $62.5 billion spent on structures, the hospitals, membership organizations, educational services, hotels, and amusement and recreation services industries accounted for two-thirds of spending. Of the $102.6 billion going for equipment, automotive and truck rental and leasing, hospitals, equipment rental and leasing, computer programming services, and engineering and accounting services accounted for two-thirds of this sector’s spending. Industries with the largest percentage increases in expenditures from 1996 were social services (82.6 percent); membership and religious organizations (63.1 percent); personal services (33.8 percent); amusement and recreation services (30.0 percent); and motion pictures, movie theaters, and video tape rentals (27.2 percent). Investment spending in business services increased 25.7 percent.

Finance

This sector had $91.3 billion in capital expenditures in 1997. This was an increase in expenditures of 4.8 percent from 1996. The 1996 estimate was significantly revised upward to correct for underreporting of investment in vehicles for lease. Nondepository credit institutions and commercial banks accounted for 86.5 percent of 1997 spending in this sector. Expenditures by most of the industries in the finance sector were up from 1996.

Communications

The communications sector invested $68.4 billion in capital goods. Telephone and other communications services accounted for 83.3 percent of the total, spending $57.0 billion. Radio and television broadcasting stations spent $11.5 billion, about half for structures and half for equipment. Both industries were up approximately 20 percent from 1996.

Retail

The retail trade sector accounted for $55.9 billion or 7.2 percent of total expenditures for capital goods. Apparel and accessory stores including shoe stores showed an increase of 24.8 percent in capital expenditures over 1996 although their share of 1997 retail spending is only 7.1 percent. The other major industries, general merchandise stores, food stores, and other retail dealers, showed no statistically significant change in capital spending over 1996.

Transportation

The transportation sector spent $45.0 billion for capital goods, an increase of 22.7 percent over 1996. Water transportation increased spending by 57.7 percent to $4.0 billion in 1997. Air transportation invested $13.6 billion for capital goods, up 26.6 percent from 1996.

Utilities

Utility companies spent $38.7 billion for capital goods in 1997 which was an increase of 5.4 percent from 1996. Electric and gas services contributed $26.5 billion or 68.4 percent of the sector’s spending in 1997. Gas, water, and other utilities accounted for the remaining $12.2 billion.

Mining

The mining sector spent $37.4 billion on capital goods in 1997. The crude petroleum, natural gas, and natural gas liquids industry spent $26.2 billion, over twothirds of the sector total. Spending in the mining sector increased 24.1 percent over 1996.

Insurance and Real Estate

This sector spent $29.3 billion for capital goods in 1997. Real estate offices spent $16.4 billion for structures. This was 81.2 percent of spending on structures in this sector.

Wholesale

This sector spent $28.8 billion for capital goods in 1997, an increase of 10.8 percent over 1996. Of this amount, $17.2 billion was for durable goods wholesalers, including motor vehicles, and $11.7 billion for nondurable goods wholesalers, including groceries and petroleum.

Construction

The construction sector spent $15.5 billion for capital goods in 1997, an increase of 12.5 percent over 1996. Spending by special trade contractors accounted for 44.1 percent of this total.

Note:

Revised 1996 Annual Capital Expenditures Survey data and associated relative standard error tables are included in this publication. Please see the Contents page in the front of this publication to locate these revisions.

The data in this report are subject to sampling variability, as well as nonsampling error. Sources of nonsampling error include errors of response, nonreporting, and coverage. Further details concerning survey design, methodology, and data limitations are contained in the appendixes of this publication.