Main Content

Results of the Ifo Investment Survey for German manufacturing in Autumn 2016

German Manufacturers: Willingness to Invest Increases

Investment by German manufacturers rose by 3% in 2016, according to the results of the latest Ifo Investment Survey. In 2017 manufacturers plan to increase their spending on investment by 5% (almost 5% in real terms). The key factors driving investment are fairly balanced, with investment in expansion and in replacement procurement accounting for a third of expenditure in 2017 respectively.

According to the latest responses to the investment survey, German manufacturers did increase their investments in 2016, but not to the extent originally planned. At around 58 billion euros, the nominal investment level of 3% (real: almost 2%) was higher than in 2015. Expenditure on investment rose in almost all key manufacturing segments in 2016; and intermediate goods manufacturers were the only group to scale back investment in new fixed assets. If differentiated according to the number of employees employed, the survey results show that larger manufacturers in particular failed to fully realise their investment plans for 2016.

At a branch level investment activity was heavily influenced by the automotive branch, which accounted for roughly a quarter of investments in manufacturing. According to the latest reports by vehicle and vehicle parts manufacturers, they reduced investment spending by 2% in 2016. Investment was also 5-10% lower than last year in the chemicals industry, in metal production and processing, as well as in the wood and paper industries. Increases in investment expenditure in 2016 were primarily seen in printing (+20%), as well as in metal products manufacturing and in the clothing industry (+15% respectively). Investment growth rates of between 5 and 10% were reported by mechanical engineering firms, food producers, the pharmaceutical industry and producers of data processing equipment, electronic and optical goods.

For 2017 German manufacturers plan to increase their investments by a good 5% (real: almost 5%). Consumer goods producers reported the highest average investment budget increase (12%). However, pre-intermediate and capital goods producers also plan to boost their investments in 2017 (+9% and/or +4% respectively).

The key factors driving investment are fairly balanced, with investment in expansion and in replacement procurement accounting for a third of expenditure in 2017 respectively. Restructuring measures only play a relatively minor role compared to the 1990s.

Almost 2,200 manufacturers participated in the investment survey conducted by the Ifo Institute in the fourth quarter of 2016. In terms of their gross fixed capital assessments, they account for a good 50% of German manufacturing.

Image

Presentation of survey results

  1. Weichselberger, Annette, "Deutsche Industrie: Zunehmende Investitionsneigung", ifo Schnelldienst 70 (05), 2017, 34-38 | Details | PDF Download

Legend

In the context of the Ifo Investment Survey, which is conducted twice a year, the Ifo Institute collects data on trends in investment in German manufacturing and mining. In addition to the past investment performance, the survey covers the investment plans for the current and the coming year as well as the objectives of the investment activities.

Contact

Annette Weichselberger

Ifo Institute
Ifo Center for Business Cycle Analysis and Surveys
Phone: +49(0)89/9224-1215
Fax: +49(0)89/9224-1463
Email: weichselberger @ ifo.de
Website


Short URL: www.ifo.de/w/3NiJcJNDM