In late spring, WIFO sampled 3,000 enterprises in manufacturing, construction and public utilities for their investment plans for 1995. Interest in the results was heightened by the fact that some domestic and foreign business cycle indicators had recently pointed to a slower pace of recovery. The results of the survey suggest that investment spending in the areas sampled will increase by 14 percent in 1995, following a decline of 7 percent in 1994. In real terms, this would correspond to an expansion of about 12 percent. According to these figures, investment should give firm support to keeping the recovery on track, while in its early stages it was mainly driven by exports and stockbuilding. The profile of overall investment is mainly determined by manufacturing industry. Industrial investment shrank 7 percent in 1994 and may rise by about 11½ percent this year, corresponding to a fall by 8½ percent followed by a 9½ percent rise in volume terms. While investment is still low when compared with the level of the early nineties and also as a ratio of overall sales, the turnaround is important from a cyclical perspective. Firms are also optimistic as regards prospective sales. The latter may total sch 923 billion in 1995, implying a further rise by 5½ percent. Real output growth is expected at 4½ percent. Sales are set to increase most strongly in the basic goods and chemical industry following poor results over the last few years. The weakest sales increase is projected for the traditional consumer goods sector: while in the food and beverages industry the effects of EU membership are mainly responsible for the weak performance, it is the competition from central and eastern Europe in the case of the apparel industry. Planned investment activity is closely in line with sales performance and expectations, being buoyant for basic goods and technical manufactures, but weak for the food and the textile industry. The latest survey results for the construction industry suggest a cutback of gross capital spending by 5 percent at current prices in 1995, following a 3½ percent decline in 1994. This mirrors the slackening demand for new structures. The electricity companies envisage capital spending totalling sch 17.4 billion in 1995, a plus of 28 percent year-on-year. For the last two years, original investment plans had subsequently been revised downwards substantially; this time, such a correction seems less likely given that most of the projects reported are well in progress. The strong trend rise in municipal infrastructure investment prevailing since the early eighties was interrupted in 1993 and 1994 by spending cuts for the Vienna underground construction works. For 1995, a resumption of growth is in sight. Additional expenditure will be concentrated on the supply of drinking water and district heating.
Investitionen werden Aufschwung verlängern. Ergebnisse des WIFO-Investitionstests vom Frühjahr 1995; Investment Set to Prolong the Upswing
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