2024-04-19 17:18:55
Demand in Germany is weak, so companies want to invest less. However, this does not apply to all areas.
Companies in Germany have cut their investment plans for the current year due to weak demand. The barometer for investment expectations fell to minus 0.1 points in March, after plus 1.2 points in November, as the Munich Ifo Institute announced on Thursday in its survey. “Global demand for capital goods and intermediate goods remains weak, and economic policy uncertainties continue to exist,” said Ifo economic expert Lara Zarges. “Many companies are therefore postponing their investment decisions.”
Industrial companies have cut back their projects most significantly. Expectations there fell from 6.6 points in November to 1.4 points in March. “Especially in the energy-intensive sectors, the proportion of companies that want to reduce their investments is higher than the proportion that plan to expand,” said Zarges. The indicator fell from plus 3.7 points in November to minus 3.1 points in March. Expectations in chemistry have fallen significantly, from 16.4 to 3.1 points.
Non-energy-intensive sectors want to continue investing
In the non-energy-intensive sectors, more companies still want to increase their investments than reduce them. However, their expectations for 2024 have also fallen from 11.2 points in November to 4.7 points in March. Behind this lies a strikingly strong correction among automobile manufacturers, it was said. Here the barometer collapsed from 34.0 points to just 1.3 points. “There is a small ray of hope coming from mechanical engineers, among others,” said Zarges. There the indicator rose from minus 2.0 to plus 7.5 points.
In retail, companies remain the most pessimistic for 2024. Even though their investment expectations have increased from minus 14.6 points to minus 13.3 points, the bottom line is that they want to reduce their investments. The service providers, on the other hand, have slightly increased their plans for the current year.