Investment Recovery Remains Uncertain. Results of the WIFO Autumn 2002 Investment Survey

According to the investment survey conducted in October-December 2002, fixed capital investment in manufacturing decreased by 9.6 percent in 2002 over the previous year and is expected to grow by 5.7 percent in 2003 (both in current prices). Expressed in constant prices the expected increase in investment is about 4.5 percent. The investment recovery in manufacturing is subject to many risks and uncertainties. The expected increase, for instance, is nearly entirely attributable to the substantial jump in investment in the motor vehicles industry and – to a lesser extent – in the intermediate industry. It is unclear to what extent such plans will actually be implemented. The enterprises in the remaining industries are still extremely cautious about their plans for the current year 2003. Excluding the results for the motor vehicle industry, investment is expected to decrease by 1.8 percent in 2003. The share of investment in non-electronic machinery and equipment increased, while the share of both building investment and electronic equipment fell. In the construction sector, investment spending fell sharply in 2002, with no sign of recovery in 2003. Here enterprises plan to reduce their investment by 5 percent in 2003 (in nominal terms). Suppliers of electricity, gas, water and public transport announce a significant increase in investment spending for 2003. After five years of reductions in capital outlays, the survey results point to growth rates of 18.9 percent for electricity and 31.1 percent for gas, water and public transport.