ifo Institute: German Companies Drastically Reduce Investment
The coronavirus crisis is having drastic consequences for investment by companies in Germany. Fifty percent of companies that participated in the ifo Business Survey in May reported postponing investment; in April that figure was 46 percent. In May, 28 percent of participating companies had even cancelled investment projects completely, compared with 22 percent in April. “These are worrying figures for the long-term development of the economy,” says Klaus Wohlrabe, Head of Surveys at ifo.
Manufacturing is massively cutting back on investments: 64 percent of manufacturing companies postponed projects in May, as against 56 percent in April. In May, 32 percent cancelled projects completely; in April it was 25 percent.
Service providers were somewhat less zealous, with 45 percent postponing projects in May after 44 percent reported postponements in April. In May, 28 percent of the companies reported cancelling investment completely; in April that figure was 22 percent.
It was a similar story in trade. In May, 44 percent of companies reported postponing investments, compared to 38 percent in April. Complete cancellations amounted to 20 percent in May and 19 percent in April.
Construction was comparatively less affected: 30 percent in May and 31 percent in April reported postponing investments, with complete cancellations amounting to 15 percent in May and 13 percent in April.
