U.S. corporate spending on capital projects could fall this year to the lowest level since 2011, with steep reductions by the energy industry and companies in other sectors cutting spending amidst broad concerns about global growth.
Among the S&P sectors, only the materials and financials sectors expect to spend more in 2015 than they did last year, according to a Thomson Reuters analysis of spending outlooks from the 255 S&P 500 companies that have offered guidance on their capex for the year.
Analyst projections for all S&P 500 companies point in the same direction: a grim year for capital expenditures.
The numbers suggest that corporate bosses across many sectors are less confident in the economy than they had been in recent years.
“They’re not spending at a pace that would suggest a global recovery,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
That could translate to lower job growth and weakness in the technology and industrial companies that typically benefit from capital spending.