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Western German Manufacturing: slight increase in investment

Author

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  • Annette Weichselberger

Abstract

The investment propensity of western German manufacturing firms has been clearly dampened this year by the poor economic situation, in particular the weak demand and the strongly reduced capacity utilisation. According to the latest results of the Ifo Investment Survey, gross fixed capital formation in western German manufacturing was almost 22% below the level of 2008. According to companies' current plans for 2010, investments will rise only slightly: by nearly 2%. For 2010 only a slight improvement of the investment climate is to be expected. Current company plans point to a slight increase in investments of only about 2%. Differentiating the investment plans according to company sizes, primarily large enterprises will increase their investments in 2010 while the small firms are planning further cuts. In light of the currently low capacity utilisation, it is not surprising that the investment motive "expansion" has clearly lost importance, now being ranked in second place. The main motive of investment activity, both for this and next year, is for "replacements".

Suggested Citation

  • Annette Weichselberger, 2009. "Western German Manufacturing: slight increase in investment," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 62(24), pages 78-82, December.
    • Handle: RePEc:ces:ifosdt:v:62:y:2009:i:24:p:78-82
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    File URL: https://www.ifo.de/DocDL/ifosd_2009_24_4.pdf
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    Citations

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    Cited by:

    1. Arno Städtler, 2002. "Leasing caught up in the investment lull Despite losses in new business, gains in market share," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 55(22), pages 34-42, November.
    2. Joachim Gürtler & Arno Städtler, 2012. "Investments in the Wake of the Financial Crisis – Equipment Leasing Continues to See Above-Average Growth," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(19), pages 47-50, October.

    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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