Fitch Ratings forecasts that EMEA corporates will boost their capex by 8% in 2010, making up roughly half the spend lost in 2009. This is a significant acceleration from the agency’s view in its previous capex report (October 2009) of a 1% decline for 2010. The turnaround can be attributed to a combination of improved demand conditions in some — particularly commodity driven — sectors, and the steps companies took to strengthen their balance sheets in 2009.
The rise in capex is, however, heavily weighted to emerging markets, which at an 18% annual growth rate accounts for almost two thirds of overall growth.
This leaves western European companies increasing spend at a less spectacular 4%. The differing rates are not simply the result of emerging markets bouncing back from a deeper dip — in 2009, emerging market capex fell by only 9% compared with 12% in developed markets.