For the fourth time, we asked FDM 300 companies to report on their capital spending for the current year, and to predict spending on plant and equipment for the coming year.
Projected spending for 2006 is above projections made for 2005 spending a year ago. But actual spending among the survey respondents was quite a bit higher in 2005 than had been projected.
Actual equipment spending for the responding companies reached $85.8 million in 2005, much more than had been projected by the 2004 group. Capital spending on their plants was also higher than expected, at $46.8 million.
What about the companies who responded to the survey in both 2004 and 2005?
Twenty-three companies reported expected spending totals for 2005 last year, and then reported actual spending for the same year. In this group, planned equipment spending was $25.66 million for 2005. Actual 2005 spending on equipment was much higher, $41.36 million.
On the plant side, expected spending for 2005 was $19.38 million in this group that responded both years. Actual plant spending for 2005 was slightly lower, at $17.12 million.
Sixty companies responded to a mail survey sent to the 300 companies that comprise the FDM 300, our mail survey sent to the 300 companies that comprise the FDM 300, our annual listing of the 300 largest companies in the secondary wood products industry.
In the survey, we asked FDM 300 companies about their capital expenditures for 2005 and their proposed budgets for 2006. We requested estimates for both plant and equipment. Last year, 62 companies responded. The year before, 70 replied, and the year before that, there were 60 respondents.
It's important to note that this isn't a scientific survey or a random sampling. It is a quick look at spending plans for 60 of the largest companies in our industry.
Some of the spending was reported by well-known names in residential furniture, but it's also worth noting that some of the larger cabinet manufacturers are continuing to modernize equipment and plants and to expand, with multimillion dollar expenditures.
There are some physical expansions, but also improvements in plant layout or material handling. Other large expansions include rough mill and finishing is still hot.
What did respondents to our survey this time plan for 2006? Slightly higher plant spending, reaching $49.7 million. That's a bit above actual 2005 plant spending.
On the equipment side, spending may cool off from 2005's numbers. In 2005, actual equipment spending reached $85.8 million, but respondents expected to spend $66.8 million in 2006. That figure is still a fairly high number compared to the earlier three years in the survey.
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