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Eastern German Industry: Renewed Decline in Investment Following Completion of Major Projects

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  • Peter Jäckel

Abstract

According to the results of the Ifo Investment Survey, the manufacturing industry in the new German states invested DM 13.5 billion in 1999, which was 7% less than in 1998. Contrary to the general trend, capital goods producers increased their fixed asset acquisitions and for the first time spent more than the basic materials and production goods industry. In 2000 eastern German industrial firms plan to invest a total of DM 12.35 billion, which is 8.5% less than 1999. The decline is exclusively attributable to a few projects that have been completed or whose budgets have been sharply reduced. The investment amount determined for 2000 also still contains a larger number of long-term, extensive projects than is to be expected for the following years. It is thus to be anticipated that investments will continue to fall for one or two years. The "normal" level that can be expected is DM 11 billion - or about 60% of the maximum reached in 1995. From this basis, investment could subsequently grow again under favourable economic conditions.

Suggested Citation

  • Peter Jäckel, 2000. "Eastern German Industry: Renewed Decline in Investment Following Completion of Major Projects," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 53(08), pages 03-08, April.
    • Handle: RePEc:ces:ifosdt:v:53:y:2000:i:08:p:03-08
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    Cited by:

    1. Peter Jäckel, 2001. "Manufacturing industry in east Germany: will 2001 mark the first increase in investment in six years?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 54(13), pages 45-52, September.
    2. Eckhardt Wohlers, 2000. "Strong economic upturn in Germany," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 35(4), pages 198-204, July.

    More about this item

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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