In 1998, U.S. businesses invested $973.6 billion in capital goods, both new and used, an increase of 11.7 percent from 1997. The 1997 estimate of $871.8 billion reflects an upward revision of $1.6 billion. Spending on new structures and equipment in 1998 accounted for $893.4 billion or 91.8 percent of total expenditures. Expenditures for structures totaled $328.1 billion, with $283.5 billion (86.4 percent) being spent for new structures. Spending for equipment totaled $645.4 billion, with $609.9 billion (94.5 percent) for new equipment.

The approximately 4.8 million businesses with employees accounted for 90.3 percent of 1998 investment spending at $879.0 billion. Their investment in structures amounted to $290.4 billion and for equipment, $588.7 billion. Spending by the approximately 17 million businesses with no employees in 1998 was $94.5 billion. Most industries showed significantly more investment in equipment than structures. Of the $973.6 billion spent in 1998, 66.3 percent was for equipment and 33.7 percent for structures. However, the mining, utilities, insurance, and real estate sectors spent more on structures than on equipment.

Of the $290.4 billion spent on structures by companies with employees, nearly 20 percent was for commercial buildings and about 15 percent each for utility structures and facilities, offices, and industrial buildings. The utility structures and industrial buildings were primarily construction of newfacilities, while the commercial buildings and offices were a mix of new construction, and remodeling, renovation, and modernization of existing facilities. In total, $91.5 billion or more than a third of newinvestment in structures was for remodeling, renovation, and modernization. Tables 5 and 6 in the publication contain detailed data on structures expenditures.

Of the $588.7 billion spent on equipment by companies with employees, about a fourth was for computers and peripheral equipment and communication, audio, and video equipment, and another fourth for transportation equipment, primarily cars and light trucks. Tables 7 and 8 in the publication contain detailed data on equipment expenditures.

A fewcompanies were unable to provide details on their investment by types of structures and/or types of equipment. This amounted to less than 2 percent of total spending by companies with employees.

• Tables

Highlights of capital expenditures by business sector

Manufacturing

This sector led in expenditures for capital goods by spending $207.3 billion, or 23.6 percent of total capital expenditures by businesses with employees. Of this amount, $39.8 billion was for structures, and $167.5 billion was for equipment. The $167.5 billion spent on equipment represented 28.5 percent of total expenditures for equipment.

Investment spending by durable goods manufacturers totaled $119.0 billion, or 57.4 percent of the manufacturing total. Most of their investment, $99.7 billion, was for equipment, while expenditures for structures amounted to only $19.3 billion. Within the durable goods sector, the communication equipment and electronic components industry was the largest component with $28.0 billion being spent for capital goods.

Nondurable goods manufacturers spent $88.3 billion on capital goods. Of this amount, $20.5 billion was for structures, and $67.8 billion was for equipment. Chemical products (excluding drugs) at $21.6 billion and food products (excluding beverages) at $13.4 billion, together accounted for nearly 40 percent of total 1998 nondurable capital expenditures.

Services

This sector accounted for $182.4 billion or 20.8 percent of total capital expenditures by businesses with employees. Of this amount $68.7 billion was spent on structures, and $113.8 billion was spent on equipment. Leading spenders in this sector were automotive and truck rental and leasing, at $31.6 billion, and hospitals, at $25.4 billion. Together they accounted for nearly a third of the expenditures for capital goods within the services sector. The industry with the largest dollar increase from 1997 in this sector was computer programming and data processing services. Total capital expenditures for that industry were up $2.5 billion from 1997, a 23.5 percent increase

Finance

This sector had $110.1 billion in capital expenditures in 1998. This was an increase of 20.5 percent from 1997. Expenditures for structures nearly doubled from $12.7 billion in 1997, to $24.4 billion. Expenditures for equipment at $85.6 billion far exceeded those for structures. Nondepository credit institutions spent $67.7 billion on capital goods, accounting for 61.5 percent of investment by the finance sector in 1998

Communications

The Communications sector invested $78.5 billion in capital goods in 1998. Expenditures for structures totaled $20.0 billion and for equipment, $58.5 billion. Virtually all of their spending was for communication structures and facilities and information processing equipment

Retail

The Retail Trade sector accounted for $63.1 billion or 7.2 percent of total expenditures for capital goods. This sector showed an increase of 12.9 percent in total capital expenditures over 1997. Of this sector’s total expenditures, $28.3 billion was spent for structures and $34.7 billion was spent for equipment

Transportation

The Transportation sector spent $51.8 billion for capital goods in 1998. Air transportation had capital expenditures of $18.0 billion, or 34.7 percent of the total. Air transportation also showed the largest dollar increase, up $4.4 billion from 1997, or 32.2 percent

Insurance and Real Estate

This sector spent $50.3 billion for capital goods in 1998, up $21.0 billion from 1997. Most of the increase was due to the acquisition of used structures by real estate offices

Utilities

Utility companies spent $42.3 billion on capital goods in 1998, an increase of 9.3 percent from 1997. Of this total, $22.4 billion was for structures and $19.9 billion was for equipment. The utilities sector was one of only four major industry groups where spending for structures exceeded those for equipment

Mining

The Mining sector spent $40.3 billion on capital goods in 1998. This industry spent almost twice as much on structures, $26.4 billion, than on equipment, $14.0 billion. Within the mining industry, the crude petroleum, natural gas, and natural gas liquids industry spent $28.3 billion, or 70.2 percent of the total

Wholesale

This sector spent $31.2 billion for capital goods in 1998. Of this amount, $16.3 billion was by durable goods wholesalers and $14.9 billion, by nondurable goods wholesalers

Construction

The Construction sector spent $18.3 billion for capital goods in 1998, an increase of 17.8 percent over 1997. Of this amount, $17.0 billion was for equipment, with 80.2 percent of that amount for new equipment

Note:

Revised 1997 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