Manufacturing in eastern Germany: clear increase in investments planned

According to the results of the Ifo Investment Survey in eastern Germany, carried out between the end of 2003 and July 2004, the investments of eastern German manufacturing, after a perceptible decline in 2002 (-6%), will increase again in 2004, approximating the level of the years 1998/99. On the basis of still not final enterprise data, an investment increase of a nominal 1% or €6.7 billion was estimated for 2003; for 2004 an increase of 9% or €7.3 billion is expected. Almost 40% of the investments planned for the current year originate from the budgets of only two industries: electrical engineering and automobile construction. Compared with the development of investments in manufacturing in western Germany (2002: a somewhat stronger drop of 7%; 2003: a repeated drop of 2%; 2004: at 4% a not so clearly planned increase), this is a quite positive result. It shows again that the total volume of investments in manufacturing in eastern Germany is strongly determined by strategic influences and not solely by business-cycle aspects.