U.S. Business Capex To Be Slow And In Line With GDP: Deutsche Bank

The recent q/q decline in total U.S. business investment spending can be seen as the end of the U.S. capex recession, though U.S. business capex will rise at a very slow pace for the rest of the cycle, believe DB analysts. David Bianco and team point out in their June 3 research piece titled “Capex recession ending….L recovery” that slow capex will imply slow GDP and perhaps even slower S&P sales growth.

U.S. business capex growth to fuel S&P sales and EPS growth

Bianco and colleagues point out that total U.S. business investment spending, including non-residential construction but excluding intangibles, dropped q/q in 4Q15 and 1Q16 and possibly will in 2Q16 too.