Wholesaling: Less expansive investment plans

Gross capital investment in wholesaling will increase in 2008, according to the results of this year’s Ifo Investment Survey, but not as strongly as in 2007, since numerous investments were brought forward to 2007 to profit from the declining-balance depreciation allowance that expired on 1 January 2008. Even though signs for a cooling in economic activity have recently increased, the situation for wholesaling is good on the whole. After a somewhat weak year in 2007, turnover in the current year has increased noticeably. For the increase of more than 10% in the first half year, rising wholesale selling prices were mainly responsible; in real terms, however, the increase amounted to only 4%. The results of the latest Ifo Business Survey, however, reveal an increasing scepticism among wholesalers, so that a weakening in business development can be expected in the second half of the year.