TEXT-Fitch: US capital expenditures growth to stall in 2013

Thu Oct 25, 2012 10:53am EDT

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Oct 25 - According to Fitch Ratings' recent special report released today,
capital expenditures for a 329 U.S. corporate company sample will grow a robust
9.6% in 2012, but decline 1.5% in 2013. Through the last-12 months ending June
30, 2012 capital expenditure in aggregate for this company sample increased
7.3%.

Spending strength in 2012 has been strongest in the automotive, energy and
utility, power and gas (UPG) sectors. Fitch's expected decline in capital
expenditure in 2013 is driven largely by a decline in spending in the energy
sector, which has been strong in 2012 due to high oil prices and rapid expansion
of natural gas production from shale.

When comparing capital expenditures to revenue, Fitch calculates that the ratio
has recovered dramatically from a low of approximately 5.2% in 2009 to reach
5.9% in 2010, and 6.2% in 2011. Fitch projects 2012 will peak at 6.8% before the
ratio declines to 6.6% in 2013 and a more normal range of 6.3% in 2014. Fitch
believes the rising ratio of capital expenditure to revenue indicates that
spending is out-pacing revenue and thus is not demand driven. This suggests
that, absent increased demand, capex must slow in future years.

The report, 'U.S. Corporate Capital Expenditure Study: Growth Stalls in 2013',
addresses the trend of capital expenditure for a 329 U.S. corporate company
sample, in aggregate and by sector, over the time period 2010-2014. The full
report is available on Fitch's web site at 'www.fitchratings.com'.


Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: U.S. Corporate Capex Study: Growth
Stalls in 2013
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