Investment spending down again in 2003

Total investment in fixed capital formation amounted to 94.6 billion euro in 2003. The volume of investment fell by 3 percent on 2002. This is the second year in a row total investment spending decreased substantially.

Investment spending in private sector down

In 2003 public spending fell slightly for the first time in five years by 0.6 percent to 16.6 billion euro.

The private sector accounted for the bulk of the decrease. Total investment by the private sector fell for the third consecutive year but the decrease by 3.5 percent is markedly below the 5.3 percent in 2002. The level of investment spending in the private sector in 2003 was below the level of 1998.

Investment spending, price level 2003

Decrease large-scale investment continues

Investment in houses fell by a moderate 4 percent. Investment in non-residential buildings fell by a noticeable 11.2 percent and was above 10 percent for the second year in a row.

Investment spending in civil engineering works decreased by 35 percent over a period of three years and reached the lowest level since 1988. Since the peak in 2002 investment by the telecommunication sector (e.g. cabling) went down dramatically. This was mainly due to the poor financial situation in the telecom sector.

More money invested in transport equipment and computers

In 2003 more money was invested in transport equipment, computers and intangible assets. The purchase of trains, trams and particularly aircraft triggered off a rise in investment by 10.5 percent. Money spent on aircraft mainly concerned replacement of old material. This process is expected to continue into 2004.

Intangible assets, mainly software, rose marginally by 0.2 percent after a decrease in 2002. Investment spending on computers was also on the way up and grew by 3.3 percent.

Investment by type of assets

First sign of recovery?

Computers and software are short-lived and relatively inexpensive. An increase in investment spending on computers and software may be an indication that the economic situation is improving.

Dirk van den Bergen and Sandra Schaaf