Capital appropriations by the nation's 1,000 largest manufacturers fell to $ 22.6 billion (seasonally adjusted) in the final quarter of 1981, reports the Conference Board. This is down 14.7 percent from the third quarter and is the largest decline since the last quarter of 1974.
(Capital appropriations are authorizations to spend money in the future. Capital expenditures are actual outlays for new plan and equipment.)
Actual capital spending by these large manufacturers edged up only 0.4 percent in the last quarter of 1981, the smallest gain in many years. While the fourth-quarter weakness in both appropriations and spending was widespread, declines in the huge petroleum industry were a major factor in the overall weakness. If petroleum is excluded, appropriations fell 12.3 percent and spending rose 1.2 percent in the fourth quarter of 1981.
For 1981 as a whole, manufacturers' appropriations totalled $106.4 billion, up only 1.7 percent over 1980 and far below the increases of 18.2 percent in 1980 and 31.8 percent in 1979. Actual capital spending in 1981 reached $102.2 billion, up 15.8 percent from 1980.
Appropriations are expected to climb about 10 percent in 1982, and spending is expected to rise 9 percent. But a fairly soft investment year is in prospect for the petroleum industry, where appropriations are expected to be unchanged from 1981 levels and the anticipated 10 percent rise in spending is the smallest since 1978. Given the large capital investment surge by petroleum firms over the last several years and slack conditions in world oil markets, this conservative outlook is not surprising. Excluding petroleum, manufacturers' appropriations could rise 15 percent in 1982.