German Manufacturing: Clear Increase in Investment Planned for 2018

According to the latest survey results, overall investments in German manufacturing, i.e. investments in new equipment and buildings, look set to fall by 12% in 2018. For 2017, by contrast, firm reports revealed an increase in investment of 3%. As in previous years, the main focus of investment activity in manufacturing in 2017 was on expanding capacity, primarily with a view to ramping up production. This will remain the case in 2018. Replacement procurement ranked second, while streamlining continues to play a minor role. Differentiated by economic sector, most branches intend to invest more this year. The sharpest increases of around 50% were reported by companies in the tobacco and clothing industries. Thanks to its high investment volumes, the planned increase in investment by the automotive industry accounted for a good seventh of the overall upturn in investment in German manufacturing.