Advanced Search
MyIDEAS: Login

Cuts in Projected Capital Outlays as Result of the Economic Slump. Results of the WIFO Spring 2002 Investment Survey

Contents:

Author Info

  • Margarete Czerny

    (WIFO)

  • Michael Pfaffermayr

    (WIFO)

  • Gerhard Schwarz

    (WIFO)

  • Robert Wieser

Abstract

According to the recent WIFO investment survey, which samples some 900 firms of the manufacturing sector, the construction sector and the energy sector as well as public transport enterprises and public utilities in Austria, investment spending will decrease by 6.4 percent in nominal terms in 2002. In real terms, aggregate investment in Austria is forecast to fall by 0.7 percent. Overall growth of the domestic economy is now gradually recovering from the downturn in 2001. The fragile development of the international economy, however, makes the uncertainty surrounding an economic upturn before the end of 2002 greater than assumed at the beginning of the year 2001. The latest business survey of the European Union supports the view that a slow recovery is under way. Although the composite index of the manufacturing sector increased during the first month of 2002, a decline was recorded in May 2002. The construction and retail trade sectors have reported pessimistic expectations since the beginning of 2002, with no sign of improvement. Due the weak growth prospects aggregate investment is forecast to decrease by 0.7 percent in real terms. Overcapacity and weak demand motivated companies to postpone investment projects. For 2003, WIFO expects a stabilisation of business expectations and a pronounced increase in aggregate investment (+3.9 percent). The enterprises of the manufacturing sector plan to reduce their investment spending substantially (-7.3 percent) in nominal terms, driving the investment/sales ratio down to 5.7 percent. The firms included in the Survey primarily cut investment in buildings and in electronic equipment. Immaterial investment in R&D as well as in marketing activities are also affected by the weak growth performance. For 2001, the average R&D to sales ratio amounted to 2.8 percent, a reduction by 0.7 percentage points as compared to 2000. Investment spending differs widely across manufacturing sectors. Companies in the motor vehicles industry and in the non-durable consumer goods sector plan to increase their capital outlays. The producers of intermediate goods, investment goods, and durable consumer goods report reductions in planned investment. The construction sector has been heavily affected by the downturn in 2001 and there is no sign of a recovery in 2002. WIFO expects an output decline; as a consequence, investment will be weak in 2002. Specifically, reports by enterprises active in building construction indicate a reduction in investment expenditures. Production growth and investment spending will be much stronger in civil engineering as a result of large projects for building up and improving the infrastructure (e.g., tunnels for train networks and motor highways). In the electricity industry the downsizing in the course of the liberalisation process is levelling off in 2002. After several years of massive reductions in capital outlays, the survey results point to a small investment increase in 2002 (+1.1 percent). Transport firms and public utilities report a reduction by 10.7 percent.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wifo.ac.at/wwa/pubid/22512
File Function: Abstract
Download Restriction: Payment required

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by WIFO in its journal WIFO-Monatsberichte.

Volume (Year): 75 (2002)
Issue (Month): 8 (August)
Pages: 495-504

as in new window
Handle: RePEc:wfo:monber:y:2002:i:8:p:495-504

Contact details of provider:
Postal: Arsenal Object 20, A-1030 Wien
Phone: (+43 1) 798 26 01-0
Fax: (+43 1) 798 93 86
Web page: http://www.wifo.ac.at/
More information through EDIRC

Order Information:
Postal: Austrian Institute of Economic Research Publikationsverkauf und Abonnentenbetreuung Arsenal, Objekt 20 A-1030 Vienna/Austria
Email:

Related research

Keywords: Investitionstest; Sachgütererzeugung; Bauwirtschaft; Elektrizitätswirtschaft; Kürzung der Investitionspläne angesichts der Konjunkturflaute. Ergebnisse des WIFO-Investitionstests vom Frühjahr 2002; Cuts in Projected Capital Outlays as Result of the Econom;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wfo:monber:y:2002:i:8:p:495-504. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.