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The decline in investment was not as shocking as the shutdown of several other areas of the economy during the coronavirus crisis. Investment has been declining from quarter to quarter for a year, mainly due to the cyclical decline in public development based on EU funds, and to a lesser extent due to the relaxation of the rapid dynamics of private investment. The rate of decline is not as severe on an annual basis as the contraction of the economy as a whole, and it is far behind it on a quarterly basis.
In other words, investments were trapped in a different cycle by the coronavirus crisis and were less affected. However, the overall investment outlook is not good, as although the sudden drop is minor, it is a much more fashionable slope.
The seasonally adjusted volume of investments in the national economy decreased by 3.3% compared to the previous quarter, thus continuing the third quarter of 2019. The trend began in the third quarter. Within this, the seasonally adjusted volume of investment in construction decreased by 2.9%, while that of investment in machinery and equipment decreased by 4.3%.
Among companies that account for 57% of investment production and employ at least 50 people, the volume of developments decreased by 12% after more than three years of continuous growth. The fact that the development activity of foreign-owned companies has become more restricted due to the unfavorable economic environment due to the epidemic played a key role in this. At the same time, in the case of budget agencies that accounted for 13% of investments, the evolution lagged further behind the base period (19%). This was partly due to the lower value of EU-funded projects than the previous year.
- It represents more than a quarter of investments in the national economy and represents the greatest weight the evolution of manufacturing was drastically reduced by 10%. With the exception of three areas, the evolution in all subsectors decreased significantly, while in heavy vehicle manufacturing, metallurgy, metal processing, and machinery and equipment manufacturing, they decreased dramatically. Through high-value projects that have been underway for a long time, volume has increased significantly in the electrical equipment manufacturing, pharmaceutical manufacturing and food industries.
- Making almost a fifth of the total investment real estate transactions its return on investment decreased by 2.0%, within which home construction expanded significantly, while developments in commercial rental facilities (eg office buildings) declined.
- The third largest area, transportation, storage The volume of investments continued to decline (9.6%), mainly due to the slowdown in infrastructure developments. Furthermore, the investments of the transport companies lagged behind the base period.
- Some areas of public finance have contributed to the decline in investment in the national economy. In the fourth heaviest zone, the public administration, protection, the volume of compulsory social security fell 29%, mainly through more moderate purchases by the central government. Investments in the eighth sector of arts, entertainment and leisure decreased by 28% due to lower spending on ongoing sports and cultural projects. HE water and waste management The fall in investment (14%) was also above the national average.
- The fifth largest area, farming, forestry and fishing investments increased slightly (by 1.8%), mainly smaller organizations increased their machinery purchases.
- The sixth largest area, Commerce, investments in auto repair decreased by 13%. The decrease in investment in the wholesale trade and in the trade and repair of motor vehicles and motorcycles was not offset by the increasing evolution of the retail trade.
- Developments have increased significantly in several smaller branches of the national economy. Also in relation to the epidemiological situation, through outstanding developments in the area of hospital care a in human health and social work Investments increased 32%. There has been a significant increase (14%) in the developments of the energy industry, including the renovations of the electrical network. the information, communication Investments in the area also increased (6.5%), which was also influenced by network development works.
- At the same time, in some smaller sectors of the economy, the decline in investment was greater than the national average. The largest drop of 55% occurred in mining, due to the drop in international energy prices. the building among economic organizations 36, one accommodation, hospitality The return on investments fell by 35%, mainly due to the moderate performance of smaller accommodations.
Cover image: Getty Images
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