IOBE: Industrial investment spending down 3.5 pct in 2016

Investment spending in the industrial sector fell 3.5 pct in 2016 compared with the previous year, reflecting lower investments in the food/beverage sector, the Foundation of Economic and Industrial Research (IOBE) said in a report released on Monday.

In a survey, conducted in the period March-April, IOBE said enterprises remained optimistic over investment trends in the industrial sector for the current year (+18.8 pct), although slightly weaker compared with an initial estimate in the previous six-month period.

Basic investment priorities for the 2017 were replacing existing capital equipment and raising production capacity for existing products, while the survey noted that high taxation, lack and high cost of capital and the prevailing economic policy in general raised hurdles in investment spending.

Investment spending in 2016 fell 3.5 pct compared with 2015. A previous survey, conducted in October-November 2016, investment spending was estimated to fall by 5.0 pct in 2016 after a -5.0 pct change in 2015.

Investment spending in the non-metal minerals and chemical sectors grew 5.0 pct and 9.0 pct respectively. In food/beverage/tobacco investment spending fell 7.5 pct, while in other industrial sectors, investment spending grew 18.2 pct in 2016 (led by clothing/footwear and textiles).