Investment Picking Up With Business Cycle Recovery. Results from the Spring 1994 Investment Survey
Capital spending by manufacturing industry in 1993 totaled 51.5 billion AS, 18 percent less than a year earlier, with the investment ratio falling to 6 percent of turnover and only one-tenth of overall investment being accounted for by industry. The slump was due to falling demand for manufactures, particularly from Germany, while exports to Eastern Europe and to regions outside Europe stemmed the decline. In 1994, industrial investment is projected to rise to 53 billion AS, implying an inflation-adjusted gain of 2 percent. While such a pick-up would be weaker than that of final sales, the usual time-lag in the recovery of investment may be shorter than in previous business cycle upturns as firms have undertaken substantial rationalization efforts during the recession, thereby limiting the squeeze in profits. Moreover, the new challenges on Eastern and Western European markets call for more flexible adjustment also concerning investment decisions. As usual, cyclical movements are strongest in the basic goods industries, where investment, having fallen by more than one-third in 1993, is set to rise by 25 percent in the current year. However, no turnaround is yet in sight in the chemical industry, which is likely to lose its top rank in terms of investment volume to the technical manufactures sector. Booming construction activity is stimulating capital formation in related industrial branches, whereas it keeps falling in the structurally weak textile and apparel industries.
Investitionen springen mit Konjunkturbelebung an. Ergebnisse des Investitionstests vom Frühjahr 1994; Investment Picking Up With Business Cycle Recovery. Results from the Spring 1994 Investment Survey
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