If there was a deficit in investment in equipment, that
would mean that capacity was being fully utilised but
businesses were unable to purchase new equipment for
reasons of cost or financing.
But such a deficit cannot
be identified in Germany. Trending shows capacity
utilisation in industry since 1991, as determined by
The long-term trend until the 2009 crisis
was a utilisation rate of about 85 percent. Capacity tends
always to be slightly underutilised because businesses
need to keep enough spare capacity to respond to any
sudden increase in demand.
The crisis is clearly visible in
2009, when capacity utilisation completely collapsed. It
revived as the economy recovered, only to collapse again
in the euro crisis. Since the second quarter of 2012 we
are again seeing significant underutilisation of capacity.
Thus businesses have little incentive to invest to expand
production, because demand is insufficient to fully utilise