How much do manufacturers in Michigan spend on equipment?

Equipment allows manufacturers to create almost every modern product, from the clothes we wear to the cars we drive.

Purchasing the latest equipment and machinery consumes more than three-quarters of American manufacturers’ annual capital expenditure budgets, Census Bureau data show. According to the latest Annual Survey of Manufactures, U.S. manufacturers spent more than $135 billion on new and used equipment and machinery in 2021. In all but one state, such spending accounted for more than 60% of manufacturers’ annual capital expenditures.

Machinery Partner examined equipment spending by Michigan manufacturing companies as part of a broader national analysis, using 2021 data from the Bureau of Labor Statistics.

Manufacturers in Michigan spent $5.7 billion on equipment in 2021, accounting for 81% of their total capital spending. Equipment is one of two major capital spending categories measured by the Census Bureau. The other is buildings and structures, which is money spent on creating new facilities or renovating and expanding existing ones. In Michigan, manufacturers spent $1.4 billion on these facilities.

Michigan ranked 19th in the nation in equipment investments. In this category, manufacturers spent $227.4 million on computers and data processing equipment and $219.2 million on trucks, cars and other road-going vehicles. The rest went to other machines, the needs of which vary widely depending on the type of manufacturing; examples include tractors, forklifts, robots and power tools.

The amount of manufacturing in a state, as well as the predominant industries, can affect how much companies need to spend on equipment. For example, aerospace, food and beverage, and computer and electronics were the top manufacturing industries in several of the highest-ranking states in the South, West, and Midwest. In all three of these industries, automation and artificial intelligence have boosted production in recent years—in many cases requiring equipment upgrades.

These common manufacturing segments are particularly impacted by social, regulatory and environmental factors that also affect their tooling spend. Increased safety concerns and evolving regulations on carbon emissions are requiring advances in inspection, assembly and other elements of aerospace manufacturing. The impacts of climate change on crop growth, wildlife habitat and livestock health are posing challenges across the food supply chain. The transition to a hybrid-virtual world, accelerated by the COVID-19 pandemic, has put pressure on manufacturers to get breakthrough technologies into people’s hands quickly and without disruption.

By acquiring the latest tools, manufacturers can produce their products efficiently while complying with safety regulations. Read the national story to further compare these expenses between manufacturers in different states.

This story features data reporting and writing by Paxtyn Merten and is part of a series leveraging data automation in 50 states.

This story originally appeared on Machinery Partner and was produced and distributed in partnership with Stacker Studio.