Higher rate of investment in equipment
Examining gross investment in equipment as a
proportion of GDP , we find that Germany
had a higher rate of investment in equipment than the
rest of the Eurozone.
The particularly strong investment
in equipment in the 1990s was associated with German
reunification. Between 2002 and 2004 the rate matched
the rest of the Eurozone, and remained higher throughout
the period 2005 to 2013, even through sharp falls in the
2008 financial crisis and the subsequent euro crisis.
So it cannot be said that German investment in equipment
performed weakly in comparison with the Eurozone –
quite the contrary. That conclusion is shared by Dullien
and Schieritz (2011), the German Ministry for Economic
Affairs (Bundesministerium für Wirtschaft 2013) and the
European Commission (2014a, 40–53).
So it cannot be said that German investment in equipment
trends show, investment in construction
is responsible for the gap, which affects both residential
and non-residential construction. The latter includes
all commercial buildings, all public buildings (schools,
universities, etc.) as well as private and public
infrastructure such as roads, railways, etc.
If we examine residential construction since 1991
we find exactly opposing trends in Germany.
EU Forecast
euf:ba18a:104/nws-01