Investment Dynamics: Companies Lower Their Expectations for 2019

According to the Investment Survey of spring 2019, the recent Swiss investment cycle is set to slow down further. In the last two surveys, the respondents already stated that their planned investment activities in 2019 would be relatively moderate. According to the latest figures, the companies have reduced their expected investment volume even further in the last six months: In the autumn survey 2018, the expected rise for the year 2019 was still 3%.

Plans for 2020 remain on the cautious side

Slower investment dynamics are mainly due to construction investments where a decline is expected in the industry and services sectors. Growth of investments in plant and machinery is also likely to be less dynamic than before. However, a robust rise is expected in research and development expenditure.

Broken down by sector, the following picture emerges: While companies in the service sector intend to reduce gross investments to some degree and manufacturing enterprises plan for a slight increase, Swiss construction companies are budgeting for considerable growth in investment sums. The construction companies intend to invest in new buildings for their production activities. However, with industrial and service companies investing less in office buildings and production halls, overall construction investments are experiencing some downward pressure.

Aside from investment amounts, the KOF Investment Survey also investigates investment structures. According to the figures, a substantial portion of the planned investment sums is earmarked for the expansion of current capacities.

As regards 2020, the surveyed companies’ investment plans are once again on the cautious side. Specifically, investments in plant and machinery in the industrial and service sector are likely to be more moderate in 2020 than in the current year.