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**FOR IMMEDIATE RELEASE**

**FRIDAY, FEBRUARY 23, 2007**

Mike Bergman CB07-29

Public Information Office

301-763-3030/763-3762 (fax)

301-457-1037 (TDD)

e-mail: \<pio@census.gov\>

**Capital Spending Up 10 Percent, Reaches \$1.1 Trillion**

Businesses invested \$1.15 trillion in new and used structures and
equipment in 2005, the largest increase since 2000, the U.S. Census
Bureau reported today.

The 2005 level surpassed the 2004 total of \$1.04 trillion by 10
percent, according to the *Annual Capital Expenditures: 2005* report,
based on the Annual Capital Expenditures Survey (ACES).

Spending on new structures and equipment accounted for almost \$1.07
trillion or

93.2 percent of the 2005 total. Nearly two-thirds of this spending
(\$702.2 billion) went for new equipment, with the rest (\$365.7
billion) allocated to new structures.

These and other findings are included in the report, which defines
capital goods as business assets that have an expected use of more than
one year and are usually depreciated. The report shows estimates of
investment by all nonfarm businesses, including businesses with and
without employees.

In 2005, businesses with employees accounted for 92.8 percent (\$1.06
trillion) of all capital investment. Only businesses with employees were
asked to report by industry. Among these businesses:

-   Manufacturing led all sectors, investing \$165.2 billion --- an
    increase of 5.5 percent over 2004. About 80 percent of this total
    (\$131.5 billion) went for equipment, the rest for structures.

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-   Durable goods manufacturers invested \$92.4 billion, while
    nondurable goods manufacturers invested \$72.8 billion.

> (more)

**Editor's Note: The report can be accessed at
\<http://www.census.gov/prod/2007pubs/ace-05.pdf**

-2-

-   The motor vehicle and parts industry, at \$23.5 billion, was the
    largest durable goods investor.

-   The food manufacturing industry, at \$14.3 billion, was the largest
    nondurable goods investor.

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-   Among sectors with the fastest growth in capital spending, the
    accommodation and food services sector spent \$31.5 billion, up from
    \$20.6 billion in 2004 --- an increase of

52.5 percent.

-   The information sector spent \$91.3 billion on capital goods, an
    increase of 9.3 percent from 2004. Wireless telecommunications
    carriers, up 13.9 percent to \$27.3 billion, and wired
    telecommunications carriers, up 10.8 percent to \$27.1 billion, led
    this sector's spending.

-   In 2005, spending by businesses with employees showed an increase in
    42 industries,

a decrease in six industries and no statistically significant change
from 2004 in

87 industries.

The ACES report shows capital investment for 135 separate industry
categories based on the 2002 North American Industry Classification
System. In addition to structures and equipment, the report also covers
spending on furniture, computers and vehicles.

-X-

The estimates in this report are base on a stratified random sample of
approximately 46,000 companies with employees and approximately 15,000
companies without employees. Responding firms account for approximately
88.3 percent of the total capital expenditures estimate.

**Data in the report are subject to sampling variability as well as
nonsampling errors. Sources of nonsampling error include errors of
response, nonreporting and coverage. More details concerning survey
design, methodology and data limitations are available in the full
report, which is available online at**

**\<www.census.gov/csd/ace/\>.**