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Wednesday, May 29, 2019
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Monday, May 20, 2019
Research Paper: Capex Spending

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Research Paper: Capex Spending
Monday, May 20, 2019

Financial analysts looking for more PPT decks to read, Calcbench has your back! We just posted a new research paper looking at trends in capital expenditures for most of the last decade.

The full paper (11 pages) is available for free on the Research Page of our website. We crunched the data on more than 9,900 firms that have reported “capex” spend since 2010, with a deeper analysis into spending trends since 2013.

We encourage you to read the full report, and meanwhile, we also have some spoilers about the primary findings here.

First, as a whole, capex spending is on its way down. Spending among all 9,908 firms peaked in 2015 at $1.236 trillion, then drifted downward to $1.102 trillion by 2018.

Second, the biggest capex spenders are BIG spenders. The U.S. firms spending the most on capital equipment this decade are, in order:

  • Exxon Mobil
  • Chevron
  • AT&T
  • Verizon Communications
  • Berkshire Hathaway
  • Walmart
  • Intel
  • Apple
  • Google
  • Comcast

The spending of those 10 firms in 2013-18 ($926.34 billion) accounted for 13.7 percent of all capex spending, among our entire sample of 9,908 firms ($6.764 trillion). In every year of that six-year period, at least eight of those 10 firms were among the year’s 10 biggest spenders.

Third, concentrated spending has held remarkably steady since 2013. Capex among the S&P 500 accounted for 50 to 55 percent of all capex every year, 2013-18. Throughout that same period, the 100 biggest spenders (regardless of which firms they were) accounted for progressively more of all capex spend.

(As an aside, be sure to read the Wall Street Journal article today about declines in capex spending among large firms, with data provided by yours truly.)

Fourth, average spending among the S&P 500 was actually drifting downward until a jump in 2018; and average spending among non-S&P 500 filers accelerated even faster. Among the big firms, average spending rose 10.6 percent from 2013-18, but largely due to a notable increase in 2018. Among smaller firms, the rise was 54.5 percent.

Fifth, the number of firms reporting capex spending dropped sharply last year — from 5,844 to 4,295. That could explain why average spending is rising among various groups, even though total spending is falling: the decline in firms reporting any capex spending at all is falling faster than the decline in overall spending, so averages get larger even while absolute numbers get smaller.

We’ll keep doing more analysis here, and we can share cuts of company-specific data upon request. Meanwhile, down the report, read our findings, and ponder what it all might mean for 2019 economic performance.

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