Capital Investment
Printing and Related Support Activities
(NAICS 323)
This section reviews private and public capital investment (capital
expenditures) for Canada's Printing and Related Support Activities (NAICS 323)
subsector between 1994 and 2003.
The data is obtained from Statistics Canada's Capital
and Repair Expenditures Survey which is used to measure capital spending.
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Position in NAICS Hierarchy |
Canada's Printing and Related Support Activities (NAICS 323) subsector is comprised of the following industry groups :
It is part of the Manufacturing (NAICS 31-33) sector.
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Definition of Capital Investment
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Statistics Canada surveys captures information on capital expenditures
(actual spending as well as spending intentions) made by private and public
organizations in Canada. In economic terms, this is equivalent to Gross
Fixed Capital Formation where firms invest on an annual basis and these
investments accumulate to a total asset base.
This is reported by type of asset such as construction or machinery and
equipment; or again (at the level of the Canadian economy) by separating total
capital spending on plant and equipment from that on housing, as this last
component is relatively large.
Capital investment are gross expenditures on fixed assets for use in the
operation of an establishment or for lease or rent to others. It includes :
- cost of all new buildings, engineering and machinery and equipment (which
normally have a life of more than 1 year) and are charged to fixed assets
accounts;
- modifications, additions and major renovations;
- capital costs such as feasibility studies and architectural, legal,
installation or engineering fees;
- subsidies;
- capitalized interest charges on loans with which capital projects are
financed;
- work done by an establishment's own labour force; and
- additions to work in progress.
Assets acquired for lease to others are included, but assets acquired as a
lessee are not.
The establishment is considered to be a private institution based on
ownership : specifically, if less than 50% of the voting rights are controlled
by the government.
Public establishments can be municipal, provincial or federal. Capital
spending by government departments involving grants and/or subsidies to outside
entities (i.e. municipalities, agencies, institutions or businesses) is not
counted by them.
Statistics Canada collects data on both capital expenditures and
repairs expenditures. However, the present section focuses only on the former.
Only actual expenditures are reported, i.e. forecasts
of spending intentions are not included.
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Accumulated Capital Investment
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Gross Capital Stock provides a measure of accumulated capital
investment. Gross capital stock is the value of all fixed assets still in use,
at the actual or estimated current purchasers’ prices for new assets of the
same type, irrespective of the age of the assets. It should be mentioned that
these data are not adjusted for depreciation of assets.
If we first examine the accumulated capital asset base for the Printing and Related Support Activities
(NAICS 323) subsector, it can be seen that the accumulated
capital investment grew from $3.8 billion in 1994 to
$4.7 billion in 2003, or at a compound annual growth rate
of 2.4%. Between 2002 and 2003, the percentage change was
0.6%.
Accumulated Capital Investment*
By Type of Asset
Printing and Related Support Activities Subsector
(NAICS 323) |
Type of Asset |
Value in $billions |
CAGR**
1994-2003 |
% Change
2002-2003 |
1994 |
2003 |
Machinery and Equipment | 2.7 | 3.3 | 2.0 | -0.1 | Construction | 1.0 | 1.4 | 3.4 | 2.1 | | | Total | 3.8 | 4.7 | 2.4 | 0.6 | Notes:
Totals may not add up perfectly due to rounding
* Year-End Gross Capital Stock (not depreciated)
** Compound annual growth rate
Source : Statistics Canada, Capital and Repair Expenditures Survey |
The chart below illustrates how accumulated investment has varied from 1994 to
2003.
Accumulated Capital Investment
By Type of Asset
1994-2003
Printing and Related Support Activities
(NAICS 323)
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Annual Capital Investment
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Growing investment is a clear herald of a heathy and growing industry, one
which realizes the need to maintain and replace capital equipment and
buildings. A decline would, conversely, be a harbinger of misfortune.
Annual investment in the Printing and Related Support Activities (NAICS 323)
subsector, grew from $ 297.8 million in 1994 to $
331.9 million in 2003, or at a compound annual growth rate
of 1.2 %. The percentage change over 2002-2003 was
0.0 %
Annual Capital Investment
By Type of Asset
Printing and Related Support Activities Subsector
(NAICS 323) |
Type of Asset |
Value in $millions |
CAGR*
1994-2003 |
% Change
2002-2003 |
1994 |
2003 |
Machinery and Equipment | 262.7 | 317.7 | 2.1 | -3.7 | Construction | 35.1 | 14.2 | -9.6 | -29.4 | | | Total | 297.8 | 331.9 | 1.2 | 0.0 | Notes:
Totals may not add up perfectly due to rounding
* Compound annual growth rate
Source : Statistics Canada, Capital and Repair Expenditures Survey |
The chart below illustrates how much capital spending has been made on annual
basis from 1994 onwards by type of asset.
Annual Capital Investment
By Type of Asset
1994-2003
Printing and Related Support Activities
(NAICS 323)
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A third way to look at capital investment is to calculate a net replacement
ratio of annual investment. Annual investment perform two functions, the
replacement of capital stock which has been sold or depreciated to zero and
enhancement of capital stock.
The ratio of annual investment to accumulated investment less the growth in
capital stock gives the net investment ratio. The degree to which
capital stock must be replaced will depend on how quickly technology changes,
how much capital is available for investment and how competitive an industry
is. In some years, annual investment may not be sufficient to off-set
depreciation and the net investment ratio will be negative.
The net investment ratio for materials and equipment changed from
1.3 % in 1994 to 0.4 % in 2003. Looking at building and
engineering construction, the value in 1994 was 3.5 % while in
2003 it reached 1.0 %. It is likely that construction will not
require replacing as quickly as capital equipment so the ratio will be lower
than it is for the later in most cases.
The chart below illustrates how the net investment ratio has varied from 1994
to 2003.
Net Investment Ratio (%)
By Type of Asset
1994-2003
Printing and Related Support Activities
(NAICS 323)
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