Figure 3
|
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).
Figure 4
|
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).
Spending trends
Figure 5
|
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
Figure 6
|
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.
|
