Capital Expenditure Report

The investment behavior of companies in different industries varies strongly. In this periodic report, ARC Advisory Group looks at a number of different manufacturing industries to identify trends in capital expenditures (CapEx) and their drivers. We calculate our CapEx Index using the same rigorous methodology we use for the ARC Automation Index, which is based on publically available data provided by major companies (but end user companies, in this case). This report also includes ARC's contextual comments on the individual industries.

Capital expenditures (CapEx) are a leading indicator for automation markets. When confidence in vertical industry markets decline, a decline in investments often follows. In this regard, 2015 was a terrible year with most process industries showing strong declines in their capital investments. The strong appreciation of the US dollar was another major factor. Currency effects alone accounted for a 15 percent drop in CapEx in Europe and Japan. Compared to process and hybrid manufacturing industries, discrete industries developed relatively well, with many sectors showing only modest contraction.

In many industries, we see signs that capital expenditures will increase gradually in late 2015 and early 2016. Following a modest contraction in 2016, ARC Advisory Group expects to see positive growth in global capital expenditures in 2017.

Global Capital Expenditures
Over the last quarters, global capital expenditures developed downward. The main negative factors have been the drop in commodity prices (mainly oil) and the euro devaluation, since ARC measures capital expenditures in terms of US dollars.

Table of Contents

• Executive Overview
• Global Capital Expenditures
• Discrete Industry Developments
• Hybrid Industry Developments
• Process Industry Developments
• Global Outlook    

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Keywords: Capital Expenditures (CapEx), Manufacturing Industries, Process Industries, Hybrid Manufacturing Industries, Discrete Industries, ARC Advisory Group.