Investments up 15% in Q3 2019
The volume of investments grew sharply in Q3 2019, exceeding the volume registered in Q3 2018 by some 15%, according to a fresh release of data by the Central Statistical Agency (KSH).
The agency says that the expansion of investments was due to enterprises – mainly those in manufacturing – as developments conducted by other economic entities did not contribute in merit to the growth. The seasonally adjusted volume of investments exceeded the previous quarter’s by 3.1%, the average of the quarters of 2015 by 57%.
Within the year-on-year rise of 15%, construction investments representing approximately six-tenth of the total volume of investments rose by 16%, investments in machinery and equipment representing about four-tenth of the total value of investments increased at a slightly slower pace by 14%. In the growth of investments in machinery and equipment, acquisitions of domestically produced assets and well as of those coming from import played a role.
Investment performance in the case of enterprises employing at least 50 people and realizing approximately six-tenth of investments increased at an outstanding 29% rate similarly to the previous periods; in the case of budgetary units investments basically stagnated (registering a minor increase of 0.2%) compared to the same period of 2018. In the case of enterprises investments of large companies increased outstandingly.
In the case of the government, investments conducted by central public administration institutions decreased, while the investments of municipalities increased.
Investment activity varies among different fields of economy
Out of the most significant sections, developments in manufacturing – representing nearly one-third of investments – grew outstandingly (29%), despite the decrease in the volume of more than half of the subsections.
KSH primarily attributes the growth to investments in the fields of manufacture of chemicals and chemical products, manufacture of electrical equipment and in the rubber- plastic- and building material industries.
In the increase of developments, greenfield investments, as well as expansions of existing capacities, played a role. Significant investment activity characterized enterprises with foreign capital as well.
The 17% growth of investments, in transportation and storage, considered the second-largest investor, lessened compared to the previous quarters. Its volume increased once again mainly as a result of ongoing road, motor- and railway constructions, at the same time enterprises operating in warehousing and storage and cargo handling conducted serious investment activities, too.
Investment performance of real estate activities, the third-largest investor, representing about 17% of total investments, also grew significantly (by 23%), the continuing increase of investments in business facilities for rent overtook the moderate growth in dwelling constructions.
In the 32% increase in the field of arts, entertainment and recreation sports-related high-scale projects played an important role.
In agriculture, mainly due to construction investments of enterprises with higher employee-numbers, investment volume increased by 15%.
Minor contribution to the total, but large growth
Out of some sections representing a relatively small weight, the volume of investments grew on a scale above the economy’s average rate. In the section of water supply and waste management, investments grew significantly (61%) due to water quality improvement, sewage water treatment and waste management projects, financed partially from EU funds.
Enterprises in construction increased their tangible-asset acquisitions by 34% as a result of the favorable economic trends within the section. Developments of financial and insurance activities grew by 32% partially as a result of bank-branch buildings’ reconstructions.
Investment performance of public administration, defense, and compulsory social security decreased by 20% compared to the base period. The decrease was mainly the result of the smaller volume of military- and police asset acquisitions, KSH says.
In the section of wholesale and retail trade, and repair of motor vehicles and motorcycles investment performance moderately decreased (by 1.4%), mainly as a result of the smaller investment spending of international chains engaged in non-specialised sales of food in the current period.
The volume of investments did not reach the value of the base period in several relatively low weight representing sections of the national economy: investments decreased in the energy industry by 20%, in information and communication by 12%, in education by 11%, in professional, scientific and technical activities by 6.1%, in mining and quarrying by 4.8% and in human health and social work activities by 3.1%.
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