ALL MANUFACTURING
Why Capital
Spending
Has Been
Doing Less
for Capacity
Total investment
(in current dollars)
Inflation
Pollution
Safety
Modernization
qq o
1969
New capacity
1970 1971 1972 1973
Over the past few years, a declining share of capital spenP*
by manufacturers has been translated into industrial‘capacity, t?
S38 billion they invested last year was nearly 20 percent above ttv'
outlays for 1969. But a good part of the increase was eaten up by
inflation, and another part went to pay for the increased costs
associated with pollution abatement and the new federal Occupa
tional Safety and Health Act. Producers of nonferrous metals, for
example, spent $322 million last year on investment that added
CHEMICALS
1970 1971 1972
co 0
1969
IRON AND STEEL
1973 1969 1970 1971 1972 197
X
\
. 1
Hjupig at all to productive capacity. And during the years since
a number of basic industries have been rearranging their
^^ipital budgets so as to put relatively less emphasis on new
* . D'joity and more on modernization and replacement. That shift
>; . ; ct.ine term ■■,! in the steel industry, which spent only 23 cents
out ot every investment dollar for capacity expansion in 19/3—
compared with 6-1 cents in 1969. Charts are based on Commerce
Deportment and McGraw-Hill data, adjusted by Fortune.
NONFERROUS METALS RUBBER
$2.0
1969 1970 1971 1972 1973
$2.0
1969 1970 1971 1972 1973
Utilities are now the strong
sector in capital spending.
Manufacturers' expenditures
continue on the downtrend,
while outlays by other indus
tries arc basically holding level.
Capital appropriations in man
ufacturing will turn up soon,
but not exuberantly. (Data for
chart at right from Conference
Board survey, adjusted by ex
clusion of oil industry, which
invests largely in operations
other than manufacturing.)