After growing more than expected in 2006, plant capital spending fell in 2007, according to a recent survey of FDM 300 companies.

We asked FDM 300 companies to share their capital spending plans with us for the current year, and to predict what they would spend on plant and equipment in 2008. We've done this survey for six years.

Projected overall spending on both plant and equipment is projected to be smaller for 2008 than it was in 2007. Actual spending on plant projects in 2007 was $32.3 million by responding companies, and equipment spending reached $66.5 million.

In 2008, this same group of companies expects to spend $43.2 million on plant, and $43.9 million on equipment capital expenditures.

Last year, we reported that companies were completing large expansions and upgrades. This indicated that spending would slow in the near term, and that appears to be happening.

Respondents

There were 53 companies that responded to a mail survey sent to all of the FDM 300 companies. This is our annual listing of the 300 largest secondary wood products companies in North America. A complete list of these key firms appeared in the February 2007 issue of FDM.

FDM 300 companies include manufacturers of cabinets, millwork, residential furniture, store fixtures and office furniture.

We asked companies about their capital expenditures for 2007 and their expected spending budget for 2008 for both equipment and plant. Last year, we had 59 companies responding, and 60 provided information the year before that.

This isn't a scientific survey or a random sample. It is a quick look at spending plans for 53 of the largest companies in our industry.

Same-company comparison

We also looked closely at the reported data from companies that responded to the survey in both 2006 and 2007. Using information reported by these 33 companies, it is possible to compare projected and actual spending for the same group.

This group of companies planned to spend $42.6 million on equipment in 2007. Actual equipment spending for 2007 was higher, at $52 million.

On the plant side, this group of companies expected to spend $36.1 million in 2007. Here, the actual plant spending was lower, and amounted to $27 million for the year.

October 2007 survey comments

"Reroofing existing facilities; computer hardware and software updates and new system."

"Planning to upgrade finish sanding and shaping equipment as well as build more space."

"Building new 220,000-square-foot metal warehouse and 20,000-square-foot office space; equipment for distribution center."

"2007 equipment: saws and CNC equipment; plant: new dust collection system and new air system. 2008: new panel saw."

"Finish room expansion; panel processing machinery."

"We bought a 400,000-square-foot facility in 2006 which should carry us through 2010."

"We have capacity to grow due to reduced demand in the housing sector."

"Expanding manufacturing capabilities (membrane press), IT hardware and software upgrades."

"Boring equipment, routers, software."

"We leased a new manufacturing facility in 2006. The amounts listed as plant spending are for leasehold improvements and renovation of existing plants."

"CNC machinery; infrastructure."

"Equipment: panel saw, router, handling equipment, computer technology, edgebanding, drilling equipment, case clamp, hot press. Building: addition to the factory; centralized warehouse."