Capital appropriations by the nation's 1,000 largest manufacturers fell to $ 24.9 billion (seasonally adjusted) in the third quarter of this year, down 3.6 percent from the second quarter, according to the Conference Board's latest survey.
While the latest dip follows a 12.3 percent decline in the second quarter, appropriations had registered a solid 26.7 percent increase in the first quarter of 1980.
(Capital appropriations are authorizations to spend money in the future. Capital expenditures are actual outlays for new plant and equipment. Appropriations are the first step in the capital investment process, preceding the ordering of equipment and the letting of construction contracts.)
Appropriations by the mammoth petroleum industry declined modestly in the third quarter, after big gains during the previous two quarters. If petroleum is excluded, total capital appropriations in the third quarter were off less than 9 percent from levels recorded at the end of 1979. This is a rather strong showing for a recession year. But even though the recession is apparently over, it's entirely possible that appropriations will drop further, since the historical pattern is for appropriations to turn upward after the turn in overall economic activity.
Actual capital spending by the largest manufacturers rose 6.9 percent in the third quarter. There was no change in the second quarter and an 8.4 percent gain in the first.
Spending continues to run well below appropriations levels. So the backlog of unspent appropriations has been rising, an unusual event in a recession year.
Corporate expectations and investment data running through the first three quarters of this year suggest that manufacturers' appropriations will climb 16 percent this year over 1979. The gain is expected to be only 5 percent if the booming petroleum industry is excluded.