Western German manufacturing: despite clouded economic situation, a further investment plus planned

According to the results of the latest Ifo Investment Survey, manufacturing firms in western Germany clearly increased their investments in 2007. At €43 billion, the level of investment (nominal and real) was a good 10 percent above the level of 2006. The increase in investment was broadly based. Most industry branches increased their investments; only in a few cases was there a reduction in investment vis-à-vis 2006. Despite the increasing indications of a business-cycle slowdown, investments in western German manufacturing will again increase in 2008, according to current plans. For 2008, the responses of the enterprises indicated an increase in investments (nominal and real) of nearly 9%. As the latest investment survey results show, the firms' investment planning is above all aimed at expanding or altering the existing production programme. The second priority is replacement investment, whereas the rationalisation motive has continued to lose importance.