Spending levels for 2010. The survey results showed a slight curtailment in spending on equipment and machinery in 2010 compared with spending levels in 2009. More than half (57.1%) of respondents either kept spending levels the same (35.3%) or decreased spending (21.8%) in 2010 compared with 2009. Roughly 43% (42.9%) increased spending in 2010 over 2009 levels. In 2009, 55.9% of respondents spent the same (31.4%) or decreased spending (24.5%) compared with 2008 levels, and 44.1% increased spending (1).For those respondents that increased spending in 2010, most did so moderately. The survey results showed that 21.9% increased spending between 0 and 2%; 20.3% increased spending between 2.1, and 4%, and 26.6% increased spending between 4.1 and 6%. The survey showed some higher spikes: 28.1% of respondents increased spending by more than 8%, and 3.1% raised expenditures between 6.1 and 8%.
For those decreasing spending in 2010 compared with 2009, the declines were steeper than the increases. More than half (52%) decreased spending by more than 6%. Twenty percent decreased spending between 6.1 and 8%, and 32% decreased it by more than 8%. The remaining spending reductions were more modest. Twenty-eight percent of respondents decreased spending between 0 and 2%; 12% decreased spending by 2.1 and 4%. Eight percent decreased spending between 4.1% and 6%.
As in 2009, overall economic conditions influenced purchasing decisions in 2010. More than half (58.3%) of respondents said they postponed purchasing (45.5%) or did not buy (12.8%) new equipment in 2010 because of overall economic conditions. The 45.5% delaying purchasing activity in 2010 was slightly higher than in 2009, when 42.1% reported postponing purchasing because of economic conditions.
Other financials came into play. One-fifth (21.2%) of respondents had difficulty in securing financing for capital investments in 2010, which was slightly higher than the 18.4% who encountered such difficulties in 2009. On a positive note, fewer respondents had to curtail their own purchasing decisions as a result of lower production levels resulting from their customers' financial difficulties. In 2010, 12.8% of respondents reduced production because of financial problems with their customers, almost half the level reported in 2009, when 23.7% limited purchasing for that reason. Interestingly, purchasing decisions also were more strongly influenced by outsourcing in 2010 compared with 2009. In 2010, 17.9% of respondents increased their level of outsourcing to reduce capital costs, almost one-third more than 2009, when 12.6% of respondents increased outsourcing to reduce capital expenditures (1).