Contradictory Signals Regarding Trends in Equipment Investment– Limited Growth in Leasing

Despite a strong start during the early months of the year, investments by leasing companies will only increase very moderately in 2012, according to the Ifo Business Survey of the leasing sector. Average growth of 0.5% to around 47.2 billion euros will be generated thanks to new business in moveable assets. The investment indicator, which is based on assessments of their business situation by leasing companies, signals a nominal decrease in investment in equipment, including other assets, of around 3% in 2012, and a larger decline in 2013. Although financing conditions remain favourable, companies are clearly cautious about investing in machinery, equipment and vehicles. The machinery capacity currently available is more than sufficient to satisfy sluggish demand as a result. Capacity utilization rates in manufacturing have been dropping for a year and have also been slightly below average since autumn 2012. The capacity utilization of machinery and equipment was 81.4% in October 2012, or almost 3.5% lower than for the same period during the previous year.