Investment spending in the manufacturing sector grew by 2.0 pct in 2017 compared with the previous year, the Foundation for Economic and Industrial Research (IOBE) said in a report released on Tuesday.
In the report “Investments in the Industrial Sector” (March – April 2018), IOBE said the increase in investments was in line with a mild rise of 3.0 pct in fixed-capital formation in current prices in metal products and machinery. The previous estimate (October – November 2017) was for an increase in investments by 12.1 pct in 2017. Most manufacturing sectors recorded an increase in investment activity last year, although some significant sectors recorded a big decline. The non-metal mineral and chemicals sectors recorded increases of 4.5 pct and 6.4 pct, respectively, the food/beverage/tobacco sector recorded an increase of 44.7 pct, while base metals rose 15 pct. On the other hand, investment spending in the clothing/footwear sector dropped 50 pct in 2017, in the textile sector it fell by 18.6 pct, while machinery equipment jumped 75 pct last year. Refinery products recorded a 56 pct drop in investment spending.
The report showed that manufacturing enterprises were more cautious in their estimates on investment spending this year, significantly reversing previous estimates. Investment spending in 2018 is projected to fall by 2.4 pct (after a 15.4 pct increase recorded in the previous report (October-November).
Investment spending in the food/beverage/tobacco sector is projected to rise by 11.6 pct, in chemicals by 44 pct and non-metal minerals by 22.9 pct. The clothing/footwear sector expects investment spending to double this year, while spending in the refinery sector is expected to drop 57 pct in 2018.
Manufacturing enterprises said that the general economic conditions prevailing in the country, availability and cost of capital and heavy taxation were negative factors for investment activity.