Newspapers' Capital Spending Is Steady

By: Mark Fitzgerald Newspapers this year are budgeting almost exactly what they ended up spending last year, according to the Newspaper Association of America's (NAA) annual Capital Expenditures Survey. Though their spending plans are flat, they represent a significant investment considering that newspapers went into 2001 with big capital budgets.

The 196 newspapers that responded to the survey said they are budgeting $476.05 million for capital expenditures this year, compared with actual spending of $478.33 million last year.

While newspapers may not yet know when the economic corner will be turned, they are positioning themselves for growth, said Tom Croteau, NAA's senior vice president of technology. "Newspapers have been weathering a difficult cycle over the last year or so, but the industry is in a good position as we start to see the first signs of a moderate upswing in the economy," he said.

Some clear trends emerge from the survey. Spending is flat on printing presses, but down significantly on other high-ticket items such as new plant construction, imaging devices, and both new and used stackers, conveyors, and strappers.

Newspapers are opening their wallets, however, for the equipment needed to store preprinted inserts as well as for computer hardware and some communication systems. Papers expect to spend in excess of 50% more than last year on both new and used inserters and collators.

Fear is motivating some big increases: Security and energy management expenditures will rise 46%, to $6.73 million. And it's not just terrorism that has newspapers watching their backs. Papers are expecting to increase last year's spending for waste management by an astonishing 188.2%, to about $1.88 million.

NAA's survey portrays an industry that may be winding up its big infrastructure investments of the 1990s. Plant construction is expected to fall 22% under last year's spending. The demand for commercial-style presses will decrease almost 25%. Spending on new post-press equipment is falling off. On the other hand, papers are filling in other parts of their newly spacious plants.

NAA's survey even hints at good times ahead for employees: Despite 18 months of sometimes wholesale layoffs, newspapers now expect they will need more chairs and desks.