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.)