Corporate investment: Weak start in 2013, improvement to set in at mid-year

Frankfurt (ots) - The investment activity of German enterprises is
directly reflecting the weak economic environment. This activity
declined in the third quarter for the third time in a row and will
shrink by 3 % for the whole year according to the KfW Investment
Barometer. An improvement is not expected until the second half of
the coming year when external economic factors strengthen again and
stimulate German economic growth. However, this boost will not be
enough to lift overall investment activity in 2013 into the positive
range. KfW expects a decline in corporate investment of 2 % for 2013.

Currently corporate investment is marked by a decline of 1.4 % in
the third quarter of 2012 compared to the previous quarter. In
addition, the revisions by the German Federal Statistical Office show
that investment decreased by 3.2 % in the second quarter instead of
the expected 1.6 %. The most important component, investments in
equipment (machinery, equipment, motor vehicles, etc), has declined
by 7.3 % since the beginning of the year. Commercial construction
(office buildings, factories) likewise shrank by 2.0 % during the
same period.

Early indicators for next year, such as new orders for capital
goods (currently 3.2 % above the previous quarter average), the
Purchase Manager Index and the KfW-ifo SME barometer, are providing
room for optimism. The global economy, particularly China and the US,
will regain its footing and lead to a pick up in German exports. As
soon as the capacity utilisation of the enterprises (currently only
81 %) again approaches its long-term average level (84 %), investment
activity will also pick up steam. At the same time, interest rates
are low, overall access to credit remains good and the energy
turnaround is creating incentives for investment to increase energy
efficiency.

"The German investment engine will restart in 2013", said Dr Jörg
Zeuner, Chief Economist of KfW Bankengruppe. "Although we expect a
decline of 2.0 % in corporate investment for 2013 overall, this fails
to show the acceleration of investment activity in the second half of
the year in the course of a global economic recovery. Our forecast
for overall economic growth next year is considerably more
optimistic. We expect GDP growth of 0.9 %, which will primarily be
driven by private consumption and housing construction."

A detailed analysis with data tables and charts on the current KfW
Investment Barometer is available under www.kfw.de/investbarometer
(German only).

Pressekontakt:
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM), Christine Volk,
Tel. 069 7431-3867, Fax: 069 7431-3266,
E-Mail: christine.volk@kfw.de, Internet: www.kfw.de/newsroom