Led by banks, declared dividends are expected to increase 10% globally this year to approximately US$1.65 trillion, according to a report published Thursday from London, U.K.-based IHS Markit.
This represents the highest level of annual growth since 2014, the firm says in a news release.
By sector, banks are expected will record the largest increase in gross payouts in 2018, growing by a forecast US$26.1 billion to US$258 billion. Industrial goods and services and technology are tied for second, with predicted gains of US$12.6 billion.
On a percentage basis, basic resources are forecast to lead the way, with a 16% gains in dividends, followed by construction and materials, up 14%), and technology, up 13%.
By region, emerging markets are projected to outperform developed markets in dividend growth.
“Our positive global forecast is based on a bottom-up analysis of more than 7,500 companies, which collectively show an encouraging economic outlook. In 2018, we expect to see stronger performance across sectors, coupled with resurgent growth in Europe and a notable decrease in dividend cuts,” says Thomas Matheson, head of dividend research, IHS Markit, in a statement.