S&P Predicts Positive Capital Expenditure Numbers for 2004

August 24, 2004 (PLANSPONSOR.com) - Standard & Poor's is predicting that for the first time in two years, capital expenditures for the S&P 500 are expected to be positive, with a change of 5.53% over last year's numbers anticipated.

The first quarter of 2004 saw the first quarter over quarter increase in capital expenditures in the S&P 500 since the final quarter of 2001, with a 5.36% increase seen over the same time in 2003. Historically, capital expenditures have been skewed towards later quarters.   Thirty-two percent of expenditures are usually made in the first six months of the year, while the third quarter usually accounts for 29% and the fourth quarter 39%.

“Given a fourth quarter boost from the demise of the accelerated depreciation schedule this year, 2004 capital expenditures for the S&P 500 should show a 5.53% improvement, compared to the -8.95% for 2003 and -15.16% registered for 2002,” said Howard Silverblatt, Equity Market Analyst at Standard & Poor’s, in a news release.   “While capital expenditures are expected to increase for 2004, they are still 3.92% off their 2002 and 18.49% off their 2001 levels.”

Not all the news is good news though, as capital expenditures for the Utilities and Financial sectors continued to lag. Telecommunication and Industrial capital expenditures, however, saw a dramatic increase.

– Kip McDaniel