In the context of its regular business cycle monitoring and forecasting exercise WIFO in late 1994 sampled some 3,000 manufacturing, construction, and public utility companies for their investment plans. The results suggest that in these sectors aggregate investment continued falling in 1994, by an estimated 5 percent (to a total of Sch 84.5 billion). Plans for 1995 provide for an increase by 13 percent. Including estimates for the rest of the economy, total gross fixed investment is projected to expand by 7½ percent in nominal and 5 percent in real values, thereby giving support to the business cycle recovery under way. In manufacturing industry, investment has been declining for the last three years, in 1994 by 5 percent in volume. The investment ratio (as percent of turnover) fell from 7.4 percent in 1992 to 5.6 percent in 1994, confirming the usual time lag of investment vis-à-vis the pick-up in final demand and output. Capacity utilization, while rising from 81 percent to 83 percent, still remains below the long-term average. According to the new plans, industrial investment is set to rise by 8 percent volume in 1995. This rebound, a consequence of the rise in demand since mid-1993, is still cautious due to the persistent substantial amount of spare capacity. Rationalization remains the dominant motive for capital spending for 39 percent of firms, although the share of those citing capacity enlargement has increased from 23 percent to 27 percent. Industrial employment, which fell by more than 3 percent in 1994, may still not have reached a turning point. The strongest rebound in investment is likely to occur in the basic and semi-manufactures industries (oil, steel, non-ferrous metals). This sector was hit the most by the past recession and has to make substantial efforts to secure its competitiveness. Investment propensity remains moderate for the time being in the fast-rising sector of technical manufactures, and appears to be further weakening in the textile branches. Investment spending in the construction industry, having stagnated in the previous year, is estimated to increase by 4 percent and 6 percent (current values), respectively, in 1994 and 1995. Survey responses from electricity companies suggest a rise by 4½ percent for 1994 and by 23 percent for 1995.
Investitionstätigkeit kommt in Schwung. Ergebnisse des WIFO-Investitionstests vom Herbst 1994; Fall 1994 Survey: Investment Gaining Momentum
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