FAZIT Company Survey by the ZEW - Companies in Baden-Württemberg Plan to Make Fewer Investments in 2009

In 2009 companies in Baden-Württemberg expect their investment activities to decrease significantly compared to the year before. This includes total investments as well as investments in information- and communication technologies (ICT). Only enterprises in the sectors IT and media expect their investment activities to increase in both fields. These are the findings of the seventh FAZIT Company Survey conducted by the Mannheim-based Centre for European Economic Research (ZEW) in November and December 2008 among roughly 1000 companies in the federal state of Baden-Württemberg.

Overall, a balance (calculated from positive and negative expectations) of 9.8 percent of the companies expect a fall in total investments. The expectations regarding investments in ICT are not considerably more positive. In this field a balance of 7.4 percent of the companies expect a decrease in investments in 2009. The transportation service providers and the manufacturing industry in particular show a negative sentiment towards total investments and investments in ICT for 2009. On balance, 24.8 percent of the transportation service providers and 19.4 percent of the companies in the manufacturing industry in Baden-Württemberg expect decreasing total investments for their enterprises. Further, a balance of 23,0 percent of the transportation service providers and 24.3 percent of the companies in the manufacturing industry prognosticate decreasing investments in ICT this year. Only the sectors IT and media in Baden-Württemberg is optimistic about the future. On balance, 0.5 percent of the companies in these branches expect total investments to increase in 2009, while a balance of 6.9 percent expects this to be true regarding investments in ICT.

The expectations of Baden-Württemberg-based companies are not only negative when it comes to their investment activities. The companies also assess funding possibilities for intended investments as more negative in 2009 than the year before. Overall, a balance of 40 percent of the companies expects funding possibilities for investments to decrease. The manufacturing industry in particular shows a negative sentiment. In this sector, a balance of 57 percent of the companies state that they expect more problems regarding investment funding this year. 51 percent of the technical service providers in Baden-Württemberg also assess the funding situation in 2009 as rather negative. The sentiment in the banking and insurance sector, however, is slightly positive (0.5 percent). In this sector a particularly high share of 65 percent of the companies do not expect their funding situation to change compared to the year before. "According to our survey the reason for the decrease in investments, which is expected in almost every business sector, is the worsening funding situation on the equity market. This shows that the global financial crisis has finally reached Baden-Württemberg-based companies," says Jörg Ohnemus, researcher at the ZEW. The survey revealed the interesting fact that especially companies with more than 250 employees expect their funding possibilities to deteriorate this year. On balance, 54 percent of these companies prognosticate increasing problems regarding their investment funding. For smaller firms with fewer than 20 employees this number is with a balance share of 38 percent considerably smaller.

For further information please contact

Dr. Jörg Ohnemus, Phone: +49/621/1235-354, E-Mail: ohnemus@zew.de