The increase in the percentage of respondents indicating spending of 2.1–4% of their overall company's revenues seems to have
come at the expense of higher levels of spending.Three ranges of spending declined in 2007 over 2006. Only 6.4% of respondents
say their companies plan to spend 6.1–8% of their overall revenues on equipment and machinery in 2007, compared with 12.2%
in 2006. Only 4.2% plan to spend 8.1–10% of their overall revenues on machinery and equipment in 2007, compared with 6.2%
in 2006. And, only 4.3% plan to spend greater than 10% of their overall revenues on equipment and machinery in 2007, compared
to 12.2% in 2006.
In terms of absolute dollar amounts, almost three-fourths of the respondents (72.3%) say their companies plan to spend $10
million or less on equipment and machinery in 2007 (see Figure 3). In 2006, 60.4% of the respondents said their companies
increased spending by $10 million or less, and 18.8% increased spending by $11–50 million (see Figure 3).
For 2007, spending at moderate levels is increasing over 2006. In 2007, 12.5% of the respondents plan to increase spending
4.1-6%; only 6.3% increased spending by this level in 2006. In 2007, 29.2% of the respondents plan to increase spending by
2.1-4%; in 2006, only 18.7% increased spending by this level. (see Figure 4).
In analyzing spending trends, 46.8% of respondents said that their company's growth in spending on machinery and equipment
is holding steady, and 8.5% of respondents said their spending will grow faster in 2007 than in 2006 (see Figure 5). Over
the past two years (2006 and 2005), 40.8% said that spending growth held steady, and 20.4% said that it grew faster year over
year. Consistent with 2005 and 2006 spending levels, 10.6% of respondents say spending on equipment and machinery is contracting
in 2007 (spending less in 2007 than in 2006), and 21.3% of respondents say their spending growth is slowing (rate of increase
is less year-over-year).
Reasons for increasing spending
Facilities expansion and new or expanded projects were the major reasons behind growth in spending in 2006 and planned spending
for 2007 (see Figure 6). In 2006, 71.4% of respondents increased spending on machinery and equipment because of facilities
expansion or new or expanded projects, and 78.1% responded similarly for spending planned in 2007. Roughly one-quarter (21.9%
in 2007 and 25.7% in 2006) of the respondents said spending growth resulted from the replacement of existing equipment.