Results of the Ifo Investment Survey for Western German manufacturing in Fall 2012
Western German manufacturing: plans for 4% increase in investment
According to the results of the current Ifo Investment Survey, a good three fifths of participants plan to invest more in 2013 than they did in 2012, while 31% are planning to cut their investment budget. The remaining 7% expect their level of investment to remain constant. This means that Western German manufacturers intend to spend around 4% more on new buildings and equipment in 2013 than in 2012. Sharp investment increases in 2013 are currently only expected in a few branches.
Western German manufacturers reported investment expenditure of around 47.1 billion euros in 2012. Compared to the previous year, this figure implies an increase of a good 6% (real: 6%). When differentiating according to size classes, however, the results show that some smaller companies significantly downwardly revised their investment plans over the course of the year. Past experience suggests that small firms are considerably more flexible in their investment activities and reacted swiftly to the deterioration in the economic climate over the course of 2012.
The top investment priority of Western German manufacturers is replacement purchasing. Around a third of investment expenditure is earmarked for this purpose. This is closely followed, however, by expansion expenditure at 28%. Only 13% of investments are earmarked for rationalising measures.
Around 1,800 Western German companies participated in the investment survey conducted in the fourth quarter of 2012. Measured in terms of gross fixed capital spending, these companies represent 49% of the Western German manufacturing sector.
Presentation of survey results
In connection with the bi-annual Ifo Investment Survey of manufacturing and mining, the Ifo Institute collects data on investment trends in Western and Eastern Germany. The survey looks at past trends in investment developments, the investment plans for the current and forthcoming year and investment motives. Data on investment activity in Eastern Germany is collected and evaluated separately due to the region’s different industrial structures.