Each year, POB asks land surveyors and geospatial professionals about their current and expected capital spending. Based on 2017 forecast and actual spending, expectations moderated and returned to previous-year levels. Respondents told POB in 2016 they expected to spend $187,222 in 2017. As this year’s study, “2014-2017 Point of Beginning Capital Investment Study,” conducted by Clear Seas Research was winding down at the end of September 2017, actual spending looked more like $129,597, 70 percent of what respondents projected in the prior-year study.

Those results aren’t totally unexpected. Surveyors and geospatial professionals vastly exceeded forecast spending in the previous cycle, so some “cooling off” might be expected. Actual spending in 2016 was an average of $207,710, 192 percent of the 2016 budget projections respondents reported in late 2015.

A number of variables affect capital spending, including elections and tax law. Businesses anticipating a bad tax climate may accelerate purchases while the climate is positive, or wait if corporate tax rates could change and favor investment. As POB was going to press, a new tax bill was being debated in the U.S. Congress, and this may be affecting the status of the budget process at many businesses as they evaluate options.
 

pob1217_capital01_capital01.jpg
The 2016 presidential election and proposed tax reforms making headlines in late 2017 may have contributed to volatility in planned vs. actual capital spending among surveyors and geospatial professionals.
 

pob1217_capital02_capital02_900.jpg
At the time of the study, many budgets had not yet been approved, but expectations were for similar or increased amounts of capital spending for 2018.
 

pob1217_capital03_capital03.jpg
Most of the surveyor’s capital spending budget goes to equipment purchases. Dollar amounts have risen somewhat faster than percentages of the allocation as budgets have generally increased over the years. In most cases (51 percent) purchases are to replace or upgrade equipment.
 

pob1217_capital04_capital04.jpg
Equipment and software budget trends remain relatively consistent, with GPS/GNSS leading equipment purchases and CAD software being the top purchase in software. An interesting development is the continued increase in spending on UAV (drone) hardware. In the three years UAVs have been tracked in the Capital Spending study, the amount allocated has increased.
 

pob1217_capital05_capital05.jpg
Surveyors clearly like to “kick the tires” when it comes to equipment purchases. Among the top methods for shopping are in-person retail or sales rep visits and trade show visits. It might be inferred that email and phone are good for follow up once the selection process or acquisition has started.
 

pob1217_capital06_capital06.jpg
As with some other budget categories, training and support are relatively consistent as a percentage of the whole, but in actual dollar terms, spending has increased dramatically. Spending nearly doubled in dollar terms between 2016 and 2017. Third-party training continues to increase its percentage of training dollars.

 
Summary

The profile of capital spending by surveyors and geospatial professionals always reflects some interesting trends, even when it is not surprising us with dramatic spikes. Whether 2016 was a result of pent up demand for new equipment and software or uncertainty over the U.S. presidential election, it clearly doesn’t appear to represent a new, sustained level of spending. But, within the spending trends, there are some interesting insights.

Click here to view the PDF of the 2018 Capital Investment Forecast

Spending on UAVs (drones) was expected to increase after the U.S. Federal Aviation Administration eased entry by establishing a knowledge-based certification for commercial UAV pilots. It has, indeed, increased, but not in some sort of mad dash to get onboard. Instead, it is a measured growth as surveyors recognize the value of the new technology but look for practical application of the tools. As with most survey technology, commercial UAVs represent a substantial investment. In an either-or choice between a total station and a UAV, many surveyors will see more day-to-day application for the latter and may delay a UAV purchase. This is not only reflected in the investment numbers (both dollars and percentages), it comes across in the reasons surveyors give for capital investments. The top rationale for spending is to upgrade or replace aging technology, followed by improving productivity. Buying equipment to develop new business or enter new markets falls well down the list.

Having observed all of that, there is a new tax bill being proposed and debated. Many respondents to the study, conducted early in the fourth quarter of 2017, said budgets still had not been finalized. After a busy year and with the potential for tax incentives for investment, 2018 could look like 2016. Stay tuned.

 

 



Please visit www.clearmarkettrends.com to purchase and download the entire report as well as access a wide inventory of other studies done in this industry. You can also email us at info@clearmarkettrends.com if you have any questions.