Western German manufacturing: Sharp reduction in investment in 2009

According to the results of the latest Ifo Investment Survey, western German manufacturers will be very reserved in their investment planning in light of the current worldwide economic crisis. Current planning of western German manufacturing firms points to a 12% reduction in investment for 2009. In 2008 they had reported a 7% increase. Especially larger firms with 250 and more employees have made considerable reductions in their investment plans. Already in autumn 2008, smaller companies had anticipated a strong minus for 2009. According to the survey responses, capacity enlargement is still the major investment motive in western German manufacturing; in comparison with 2008, however, this motive is now much weaker. The firms are less interested in enlarging the capacities of their existing production programme than in expanding their production capacities as a result of changes or expansion of their product range.