General highlights

In 2006, U.S. nonfarm businesses invested $1.31 trillion in new and used structures and equipment, an increase of 14.4 percent from 2005.⁽¹⁾ (See Tables 1a and 1b.)

Expenditures for new and used structures totaled $490.3 billion, an increase of $88.7 billion (22.1 percent) from 2005. (See Figure 1.) Of this amount, $450.9 billion (92.0 percent) was spent for new structures. Expenditures for new and used equipment totaled $819.1 billion, an increase of $85.0 billion (10.2 percent) from 2005. Of this amount, $774.7 billion (94.6 percent) was spent for new equipment. Total spending on new structures and new equipment was $1.23 trillion, up $158.4 billion (14.8 percent) from 2005.

The Annual Capital Expenditures Survey collects data from companies with and without employees. Companies with employees accounted for $1.22 trillion (92.9 percent) of total capital spending in 2006, an increase of 14.5 percent from 2005. These companies invested $455.5 billion in structures, an increase of 23.5 percent from 2005, and $761.1 billion in equipment, an increase of 9.7 percent from 2005 (See Figure 2.)

Companies without employees accounted for $92.8 billion of capital spending in 2006, an increase of $10.6 billion (12.9 percent) from 2005. These companies spent $34.8 billion on structures, not statistically different from the prior year and $58.0 billion on equipment, an increase of 17.5 percent from 2005.

• Tables
• Figures

Highlights by business sector and industry for companies with employees

(See Tables 2, 3, and 4.)

(Business data are based on the 2002 North American Industry Classification System. Companies without employees are not asked to report capital expenditures by sector or industry.)

Of the 19 sectors covered in this report, 9 had a statistically significant increase in spending compared with 2005, and 10 showed no statistically significant change. (See Table A and Figure 3.)

Of the 135 industries covered in this report, 54 had a statistically significant increase in spending, 13 had a statistically significant decrease, and 68 showed no statistically significant change from the prior year.

Manufacturing

The manufacturing sector spent $191.0 billion on capital goods in 2006, an increase of 15.3 percent from 2005. Of the total spending by this sector, $41.7 billion was for structures and $149.3 billion was for equipment. (See Figure 4.)

Investment spending by durable goods manufacturers totaled $105.0 billion, an increase of 13.9 percent from 2005. Of this amount, $17.4 billion was for structures, while $87.5 billion was for equipment. The motor vehicle and parts industry was the largest durable goods investor, spending $24.4 billion in 2006, not statistically different⁽²⁾ from 2005. The semiconductor industry was the second largest durable goods investor, at $14.9 billion, up 44.7 percent from 2005.

Nondurable goods manufacturers spent $86.1 billion on capital goods in 2006, an increase of 17.2 percent from 2005. Spending for structures was $24.3 billion, and spending for equipment was $61.7 billion. The top two contributors in this category were the food manufacturing industry at $16.6 billion, not statistically different from the prior year, and the petroleum and coal products industry at $14.7 billion, up 40.4 percent from 2005. The basic chemical, resin, synthetics, rubber, and fiber manufacturing industry spent $11.2 billion, up 49.6 percent from 2005.

Finance and insurance

The finance and insurance sector spent $169.4 billion on capital goods in 2006, an increase of 5.0 percent from 2005. Of this amount, $42.6 billion was for structures and $126.8 billion was for equipment. The leading industry spender in this sector was nondepository credit intermediation (e.g., sales and lease financing, and credit card issuing) at $93.8 billion, an increase of 2.0 percent from 2005.

Real estate and rental and leasing

This sector spent $122.4 billion on capital goods in 2006, an increase of 18.9 percent from the prior year. One of the two leading spenders in this sector was the automotive equipment rental and leasing industry at $53.4 billion, up 6.5 percent from 2005, with virtually all spent for equipment. The other leader, real estate, spent $43.6 billion, with 89.9 percent of this amount spent for structures.

Information

The information sector spent $104.6 billion on capital goods in 2006, an increase of 14.5 percent from the prior year. Of this spending, $34.4 billion was for structures and $70.2 billion was for equipment. The leading industry spenders in this sector were wired telecommunications carriers at $32.1 billion, an increase of 17.8 percent from 2005, wireless telecommunications carriers at $28.0 billion, not statistically different from 2005, and cable and other program distribution, at $17.2 billion, an increase of 33.2 percent from 2005.

Mining

The mining sector spent $98.3 billion on capital goods in 2006, an increase of 47.3 percent from 2005. Spending for structures totaled $68.0 billion and spending for equipment totaled $30.3 billion. The oil and gas extraction industry at $75.0 billion (up 48.3 percent from 2005) accounted for 76.3 percent of the sector’s overall capital spending in 2006.

Retail trade

In 2006, capital spending by the retail trade sector was $86.9 billion, up 18.2 percent from 2005. Of this spending, $43.3 billion was for structures and $43.6 billion was for equipment. The leading spender in this sector, other retail trade stores including gasoline stations, spent $30.9 billion in 2006, up 18.7 percent from 2005. The second leading spender, general merchandise stores, spent $22.4 billion in 2006, up 27.2 percent from 2005.

Health care and social assistance

The health care and social assistance sector spent $75.4 billion for structures and equipment in 2006, not statistically different than 2005. The leading contributor to overall spending in this sector was general medical and surgical hospitals at $43.5 billion, up 4.1 percent from 2005. The second largest contributor was the nursing and residential care facilities industry at $9.8 billion, not statistically different than the prior year.

Utilities

The utilities sector spent $70.0 billion on capital goods in 2006, an increase of 20.6 percent from 2005. Within this sector, the electric power generation and distribution industry accounted for $60.0 billion, an increase of 26.9 percent from 2005, and 85.7 percent of the sector’s total capital spending. The natural gas distributors industry spent $7.4 billion on capital goods, not statistically different from the prior year.

Transportation and warehousing

Total spending by this sector was $67.4 billion in 2006, an increase of 18.4 percent from 2005. The sector’s top spender was the truck transportation industry at $18.6 billion, not statistically different from 2005. The rail transportation industry was second at $9.6 billion, up 16.3 percent from 2005, followed by the air transportation industry at $8.9 billion, down 6.9 percent from 2005.

Wholesale trade

The wholesale trade sector spent $42.9 billion on capital goods in 2006, not statistically different than 2005. Within the sector, the merchant wholesalers durable goods industry spent $28.5 billion, not statistically different than the prior year. The merchant wholesalers nondurable goods industry spent $13.6 billion, not statistically different than 2005.

Accommodation and food services

This sector’s capital spending totaled $35.6 billion in 2006, not statistically different than 2005. The traveler accommodation services industry, which includes hotels and casino hotels, accounted for $21.8 billion of the total, not statistically different than 2005. The food services and drinking places industry accounted for the remaining $13.8 billion, down 16.5 percent from 2005.

Professional, scientific, and technical services

This sector spent $30.3 billion for capital goods in 2006, not statistically different than 2005. Two of the largest contributors to this total were the computer systems design and related services industry at $7.6 billion (not statistically different than the prior year), and the scientific research and development services industry at $5.1 billion, down 32.8 percent from 2005. A third leading contributor, architectural, engineering, and related services spent $4.8 billion, not statistically different than the prior year.

Construction

The construction sector spent $30.3 billion for capital goods in 2006, not statistically different than 2005. The leading spender in this sector was the special trade contractors industry at $14.1 billion, not statistically different than the prior year. The second leading spender was the heavy and civil engineering construction industry at $9.7 billion, an increase of 21.5 percent from the prior year.

Other services (except public administration)

This sector spent $26.0 billion on capital goods in 2006, not statistically different than 2005. The religious, grantmaking, social advocacy, civic, and social organizations industry was the sector’s largest spender at $16.8 billion, not statistically different than 2005.

Educational services

The educational services sector spent $22.6 billion on capital goods in 2006, up 29.2 percent from 2005.

Administrative and support and waste management

This sector spent $19.1 billion on capital goods in 2006, not statistically different than 2005. The office administrative, facilities, employment, and other support services industry, at $6.5 billion (not statistically different than the prior year), accounted for 34.3 percent of this sector’s total spending. The waste collection, treatment, and disposal industry, at $4.9 billion, not statistically different than 2005, accounted for 25.7 percent of the sector’s spending.

Arts, entertainment, and recreation

This sector spent $17.0 billion on capital goods in 2006, not statistically different than 2005. The amusement, gambling, and recreation industry, which accounted for 72.4 percent of all capital expenditures in this sector, spent $12.3 billion, not statistically different than the prior year.

¹ The 2005 estimate of $1.14 trillion presented in this year’s report reflects a $1.16 billion downward revision from that reported in last year’s report. The present report compares business investment in 2006 and 2005. For an assessment of investment spending patterns over a longer period, see 2007 Spending Report: U.S. Capital Spending Patterns—1999-2005

² Statistical difference is determined at the 90% confidence level and is arrived at by calculating a confidence interval (or range) about the estimate of change. If this range contains zero (0), then it is uncertain whether there was an increase or a decrease; that is, the change is not statistically different. Refer to the “Reliability of the Estimates” Section of Sampling and Estimation Methodologies for a detailed explanation of a confidence interval.