Western German industry: Following an investment decline in 2002, a recovery is expected this year. Latest results of the Ifo Investment Survey

As the current results of the Ifo Investment Survey show, western German manufacturing reduced its investments last year for the first time since 1994. According to a special survey conducted by the Ifo Institute in mid-2002, every third enterprise had already revised its investment plans downward in the course of the first half year. The main reasons were the general economic situation and the order reserves. Overall, western German industry invested about 5% less in new buildings and equipment than in 2001. According to the plans of the enterprises, investments will increase again in 2003: 55% of the enterprises intend to increase investment spending in 2003 while 32% plan to invest less than last year. Approximately 13% will invest just as much as in 2002. In 2003, western German industry will thus invest almost 5% more than last year. The main investment type is for replacement. On average, a third of investment spending this year will be for replacement. Expansion investment is in second place at 25% followed by rationalisation measures at 20%.