“Investment spending in emerging markets is outpacing expenditures in developed economies for the first time, as a surge in infrastructure supports global growth and profits at companies from Siemens AG (SIE) to Caterpillar Inc. (CAT)
The “biggest investment boom of recent decades” will help boost expansion worldwide about 4 percent this year and next, compared with a long-run average of just below 3 percent, according to Michael Saunders, Citigroup Inc.’s chief European economist. International Monetary Fund data show investment will top 24 percent of global gross domestic product in 2012, the most in more than two decades, and then rise above 25 percent, the highest since records began 30 years ago.
Saunders calculates that developing nations will probably secure the largest share of it this year. That’s showing up in the bottom line of Siemens, Europe’s largest engineering company. The Munich-based business predicts profits will rise about 75 percent to at least 7.5 billion euros ($10.6 billion) in the year ending Sept. 30.”
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