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Western German industry: Still no clear increase in investments expected

Author

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  • Annette Weichselberger

Abstract

According to the latest results of the Ifo Investment Survey, western German manufacturers increased their investments in 2004 only insignificantly (1% over the previous year); the original investment plans were thus only partly realised. The increase in real terms was by about the same amount due to the virtually unchanged prices for capital goods. For 2005 the investments of the western German industry will increase - according to the plans of the enterprises - by only a slight amount: The expected increase for this year is 2%. The main reason for this small rise in investment in 2004 and 2005 is the development in the automobile industry, which because of its high capital spending in preceding years now accounts for a quarter of investments in manufacturing. Last year this industry reduced its investments, and also this year it again intends to limit its spending on new plant and equipment. The major investment type of the western German manufacturing this year (and also last year) is replacement spending. On average, a third of the investment budget this year is earmarked for replacement investment. With a share of 24%, expansion investments are again in second place, followed by rationalisation measures at 19%.

Suggested Citation

  • Annette Weichselberger, 2005. "Western German industry: Still no clear increase in investments expected," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(01), pages 34-39, January.
    • Handle: RePEc:ces:ifosdt:v:58:y:2005:i:01:p:34-39
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    Citations

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    Cited by:

    1. Erich Langmantel, 2005. "Investments in plant and equipment: eastern German share stagnates," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(11), pages 12-15, June.
    2. Peter Jäckel & Annette Weichselberger, 2005. "Investments in manufacturing in eastern Germany: 2004 strong overall increase, for 2005 cutbacks offset by growth in all industry branches," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(10), pages 23-28, May.
    3. Joachim Gürtler & Arno Städtler, 2005. "Leasing industry maintains its growth path, but equipment investment is still sluggish," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(04), pages 49-52, February.
    4. Joachim Gürtler & Arno Städtler, 2005. "Leasing: Cautious optimism but dynamism lacking in equipment investment," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(10), pages 29-32, May.

    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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