Since 1989 the Ifo Institute has prepared forecasts for the German machine tool industry for the Association of German Machine Tool Manufacturers (VDW e.V.). The forecasting for a five-year period is up-dated semiannually and sent to the member firms.The Association sees itself as a service provider for an industry characterised by medium-sized firms and offers them a foundation for strategic planning that is too expensive for them to do on their own.The forecast system consists of three modules: an econometrically supported short-term forecast based on the development of the most important customer industries, a medium-term forecast of trends in the most important sales areas, and a scenario that presents the most important exogenous variables for the model computation so that the domestic demand and exports in twelve different areas can be estimated. The Ifo Investment Survey serves as an important instrument for estimating domestic demand since it contains vital information on the development of investment activity – with an industry breakdown – for the recent past and the near future. The results are presented and discussed with industry experts at the VDW market research meetings in spring and autumn every year in Frankfurt.
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