story by Kim Souza
ksouza@thecitywire.com
Wal-Mart Stores was among the top five big spenders for U.S. development last year that doled out $66.7 billion for business infrastructure which includes facilities, property and equipment, according a report from the Progressive Policy Institute.
Since 2011 the top five anted up $198.6 billion in U.S development projects. The five in the Institute report are:
• AT&T: $20.944 billion ($60.509 billion in the past three years)
• Verizon: $15.443 billion ($46.643 billion)
• ExxonMobile: $11.072 billion ($34.929 billion)
• Chevron:$10.562 billion ($31.377 billion)
• Wal-Mart: $8.652 billion ($25.144 billion)
Last year’s U.S. investment among the top 25 big corporate spenders totaled $152 billion, up 1.47% from the year-ago period, said PPI economist Diana Carew. She told The City Wire that the increase was slightly below the 2% to 2.5% rate from the two prior consecutive years.
She said the report’s mission is to draw attention to companies and industries that are investing in America’s future. Carew said companies that invest in the U.S. create opportunities for economic growth.
“We know government policies can greatly impact corporate investment which is why we’re advocates for policies that encourage spending here among U.S.-based corporations,” she said.
DIGITAL/WIRELESS
Telecom has led in U.S. infrastructure spending over the past three years with competitors AT&T and Verizon forking over a combined $167.652 billion, of which $107 billion was invested into domestic wireline and wireless networks.
Carew said to put that number in perspective one should consider that all government investment in airports, urban mass transit, and other non-highway transportation projects in the U.S. over the same period came to only $81 billion.
She said as the world becomes more connected via technology the economy must also evolve into one that’s data-driven. Carew does not expect a pullback in spending among telecom and technology companies anytime soon.
Ironically as the world becomes more interconnected, Carew said it is imperative that all types of companies invest more in digital, mobile and other technological advances at home to better compete in the “Internet of Things” world. The Internet of Things is a concept that describes a future where everyday physical objects will be connected to the internet and be able to identify themselves to other devices, according to Techopedia.com.
Wal-Mart, a traditional discount retailer is leading its sector in tech-related spending. Last year roughly $2.5 billion of the $8.862 billion Wal-Mart invested went to technology- related expansion projects in the U.S., according to PPI.
Wal-Mart’s tech spending equaled more than half of the total investments by tech giants Google and Apple at $4.697 billion and $2.807 billion, respectively. Wal-Mart also spent slightly less on its U.S. tech investments than Amazon’s total spending of $2.648 billion last year.
RETAILER SECTOR
Carew said Wal-Mart was the only retailer on the top 25 big spenders list, Amazon which ranked No. 25 is listed as an internet company.
As a sector, retail ranked sixth out of seventh in terms of U.S. investment last year at roughly $9 billion. Transportation ranked lower at $7 billion with investments by Union Pacific Railroad at $3.496 billion and FedEx’s $3.198 billion, according to PPI.
The report did mention Kroger, Target and CVS as retailers also ramping up their U.S. investments in the last year. In 2013, Kroger’s capital spending was $2.33 billion, CVS spent $1.974 billion and Target spent $1.886 billion.
Coming out of the 2007 recession, the retail-wholesale trade sector curtailed its U.S. investment 11.2% though 2012. Manufacturing investment declined 4% during the same 5-year period.
OIL/GAS
The sector contributing the biggest gains to the nation’s economic recovery post 2007 has been oil and gas exploration amid the natural gas fracking boom. This segment increased U.S. investment 31% between 2007 and 2012, according to PPI. The Telecom, cable and internet sector investment was second with 21.2% growth.
This year’s list also included 10 energy companies either involved in the exploration and production of oil and gas, or involved in energy distribution and power. All told, these 10 companies invested a total of $57 billion in 2013, or 37% of the top 25 investment.
Much of the investment by the oil and gas companies on the list was concentrated on deepwater oil reserves off the Gulf of Mexico. In addition, these companies reported sizeable oil and gas exploration and production investment on reserves in Alaska, California, Louisiana, North Dakota, Ohio, Texas and Wyoming.