Based on analysts'estimates, capital expenditures of 2,137 Asian companies are likely to fall by an average of 4% this year. The data also show that revenue growth is expected to be flat at 3.3%.
By contrast, capital expenditure of these companies increased by nearly 8% in 2018.
"We think there are several factors that are not conducive to the growth of capital expenditure," said Joseph Devine, chief investment officer of Macquarie Investment Management's global equity sector, excluding the United States.
"Credit has tightened, and the dollar is strong. In other markets, such as India, the bank lending cycle may have peaked. China's car demand is slowing down.
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Capital expenditure refers to the funds used by an enterprise to purchase or upgrade equipment, purchase real estate or build factories to help an enterprise expand or maintain its competitiveness. Cutting capital expenditure may slow future revenue growth, but it is often seen as prudent in times of economic uncertainty.
As the engine of Asia's economy and the world's second largest economy, China's economic growth fell to its lowest level in nearly 30 years last year, and there is widespread expectation that it may slow down further this year. The Chinese government continues to prevent and control corporate debt risks and strive to resolve trade disputes with the United States, which will inevitably affect economic growth.
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