Global & Geopolitical Developments

November 10, 2026

Utilities, Defense and Digitization are Driving Europe’s Capex Revival

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Torsten Slok

Partner, Chief Economist

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European companies are investing again. The capex-to-sales ratio is approaching a 10-year high, and European listed companies are expected to spend €77 billion more on capex in 2028 than in 2025, see charts below.

Utilities alone account for €31 billion, or around 40%, of the increase. Defense capex is expected to rise 36%, industrials excluding defense 24% and information technology 78%.

This comes after a long period of underinvestment. Across Europe, higher spending on energy, grids, defense, reshoring, infrastructure and digitalization is now lifting capital intensity.

The US capex cycle is dominated by AI. Europe's has a different mix: more of the increase is being driven by infrastructure, defense and power.

The bottom line is that capex is rebounding across Europe, and the industrial renaissance has gone global.

Written by Huw van Steenis

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