Capex Expected to Collapse 25% in 2015

Business investment has played an integral role in hopes that a bustling U.S. economy would light the way for the rest of the world in 2015.  Tumbling gas prices, a newly resurgent U.S. dollar and a weak-spending consumer have taken considerable luster off that picture.

In fact, companies reporting quarterly earnings are predicting not robust times ahead but rather tepid profit growth, with a cornerstone of those forecasts being a drop, not a rise, in capital expenditures, or capex.

Goldman Sachs lowered its capex forecast from a gain of 6 percent to a decline of 3 percent, a stunning turnaround that the firm attributed primarily to weakened energy companies that have suffered from oil’s decline. The number represents the worst figure since the financial crisis days of 2009.


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