As corporate executives put the final touches on their 1983 budgets, spending plans for new buildings and production equipment are being slashed.
Next year, for instance, the Hughes Tool Company, a Houston-based maker of oil drilling and production equipment, will spend ''no more than half'' of the $ 300 million it invested in the business this year, a company official says.
Hughes is not alone. After adjustment for inflation, US companies plan to invest 8.5 percent less in their operations next year than they did this year, according to a recent survey by the Economics Department of the McGraw-Hill Publications Company. And the 450 major companies that were surveyed said their capital spending this year would be 4.5 percent lower than last, after taking inflation into account.
As a result, economic recovery will be less robust, upward pressure will remain on unemployment, and modernization of factories will be delayed.
Managers are chopping spending plans because they are already saddled with excess production capacity. ''There is plenty of plant and equipment around without building more,'' says Edward Yardeni, senior vice-president of Prudential/Bache Securities. In September, 31 percent of US production capacity was idle.
Meanwhile, sagging corporate profits have cut into the funds companies have available to invest. At Hughes Tool, for example, net income per share for the first nine months of the year is down 26.4 percent.
''Cash flow will improve next year, but it will be used to reduce pressure on balance sheets'' burdened with debt, Mr. Yardeni asserts.
While the drop next year could be reduced if a recovery occurred faster than corporate managers expect, ''I dont think there is any way we will see'' an upturn, says Joseph Spiers, a senior economist at McGraw-Hill.
Lower spending for plant and equipment will not abort the weak economic recovery expected next year. But it could cause some additional upward pressure on unemployment, which is already at a post-World War II high of 10.4 percent. That is because cuts in capital spending imperil the jobs of individuals still at work putting up buildings and turning out production equipment. And any further boost in unemployment weakens demand for consumer products and the equipment used to produce them.
''The negative interaction among economic sectors characteristic of a recession is still very much in evidence and could continue for a while,'' the Goldman, Sachs Economic and Financial Market Research Group recenty wrote clients.
And slimmer capital budgets mean some delay in the modernization of American industry. ''We have had very rapid obsolescence of equipment due to extremely high inflation and the extraordinary increase in energy costs,'' says Ben E. Laden, vice-president and chief economist at T.Rowe Price Associates Inc., a mutual fund manager. ''That has left us with a very inefficient capital stock,'' or collection of production equipment.
The slower pace of US capital equipment spending is not expected to seriously erode the nation's international competitiveness in manufacturing technology. ''Other nations also are in pretty bad shape in capital spending,'' Mr. Laden notes.
Ironically, though, capital spending by American companies may get less of a boost from the expected economic recovery than do foreign competitors.
''If the dollar remains strong in foreign exchange markets next year, as we expect, then the rust-bowl industries (autos, steel, farm equipment, machine tools) in the United States will find that the coming domestic recovery will mostly benefit their overseas competitors,'' Mr. Yardeni says.
Of course, not all potential purchasers of buildings and equipment are cutting their 1983 capital budgets at the same rate. When 1982 and '83 capital spending plans are compared, the biggest percentage drop comes at the airlines, which have cut projected outlays 29.7 percent, while food and beverage producers have trimmed spending targets 22 percent, according to McGraw-Hill data. The hard-hit mining industry has reduced spending plans 13.5 percent, and recession-ravaged iron and steel makers have cut plans 15.5 percent.
The spending cuts planned for 1983 come on top of reductions made earlier. For example, the Clark Equipment Company of Buchanan, Mich., plans to spend ''a little under $40 million this year and a little over $40 million next year'' on purchases of equipment and buildings, a spokeswoman says. By contrast, this maker of forklift trucks and truck transmissions spent $61.8 million in 1981 and
Producers of high-technology goods like computers, scientific instruments, and semiconductors are one major exception to the downturn in capital spending. McGraw-Hill shows this sector posting a 15.4 percent increase in capital spending next year. ''They should see orders (for products) improving'' in 1983, Yardeni notes.
Economists expect that different types of capital goods will both fall and recover at different rates. Purchases of new factories and offices will drop 5 percent in 1983, economist Spiers predicts. Equipment purchases will drop 3.1 percent.
For 1984, most forecasters see capital spending rebounding along with the economy. ''In the manufacturing category, almost every industry . . . has double-digit increases slated for 1984,'' Spiers says.
Much of the pickup will come in outlays for equipment, as a recent overbuilding of office buildings is expected to hold down spending on structures. Mr. Laden notes, ''In equipment you have a lot of lower-priced items which tend to pick up early, like office equipment, computers, and vehicles.''