This is the fifth edition of S&P Global Ratings’ corporate capex survey and the first one where we can point to a genuinely positive outlook for capital investment. Our latest estimates suggest that inflation adjusted global corporate capex will rise 5.5% in 2017, following four years of sharp contraction (see chart 2). Excluding energy and materials, prospective capex growth is slightly higher at 6% (see chart 3).

Current consensus and guidance-based estimates for 2018 and 2019 are less positive, suggesting a stalling of growth. However, our analysis suggests that there is a general tendency for analysts to undershoot with their early estimates of second and third year capex. For this reason, we expect that 2017’s upswing will gather momentum, absent an unexpected deterioration in global economic growth, which is not S&P Global Ratings’ base case.

While 5%-6% rates of growth are low relative to the more rapid expansion of capex seen in the mid-2000s and in the bounce back immediately after the 2008-2009 crash, this should not detract from what is an important turning point in the capex cycle. Most importantly, this signals not only a returning confidence in the corporate sector but an upturn that it is not reliant on the commodity nexus that drove the prior upswing, the unwinding of which has constrained overall capex prospects.