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Clear cut backs in investments and leasing - 2009 threatens to be recessionary

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  • Arno Städtler

Abstract

As the most recent Ifo Investment Survey shows, German leasing companies have not escaped the general downturn in economic activity. In the first three quarters of 2008, leasing still received support from tolerable investment activity. As of late autumn both investment activity and leasing business declined sharply. For the development of spending on plant and equipment in 2009, there are very high forecasting risks. The current investment cycle, after its accelerated downturn in the closing months of 2008 and in 2009, will move towards its trough. This cyclical weakening will be amplified by the effects of the world financial crisis and, last but not least, by the expected weak sales in automobiles. The Ifo December economic forecast assumes that equipment spending will decline by 10 percent, price adjusted, in 2009; for investments in non-residential construction, the estimated value is about minus 2 percent.

Suggested Citation

  • Arno Städtler, 2008. "Clear cut backs in investments and leasing - 2009 threatens to be recessionary," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(24), pages 70-81, December.
    • Handle: RePEc:ces:ifosdt:v:61:y:2008:i:24:p:70-81
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    File URL: https://www.ifo.de/DocDL/ifosd_2008_24_4.pdf
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    References listed on IDEAS

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    1. Annette Weichselberger, 2008. "Western German manufacturing: despite clouded economic situation, a further investment plus planned," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(16), pages 29-34, August.
    2. Manuel Birnbrich, 2008. "Retailing: Also in 2008, continuing investment dynamics mainly borne by large retailers," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(15), pages 41-45, August.
    3. Joachim Gürtler & Arno Städtler, 2007. "Boom in plant and equipment spending peaks out - business expectations in leasing moving sideways," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(23), pages 32-35, December.
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    Cited by:

    1. Joachim Gürtler & Arno Städtler, 2008. "Downturn in equipment investments - an historical low in the equipment leasing business climate," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(23), pages 49-52, December.

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    1. Joachim Gürtler & Arno Städtler, 2008. "Downturn in equipment investments - an historical low in the equipment leasing business climate," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(23), pages 49-52, December.
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    JEL classification:

    • L89 - Industrial Organization - - Industry Studies: Services - - - Other

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