Construction projects are boosting Swiss companies’ investment plans

This planned capital expenditure is increasingly to be allocated to new buildings and conversions of corporate and commercial buildings (see Chart G 12). The proportion of firms whose construction investment is set to grow in the current year has risen from 31 per cent in autumn 2021 to 51 per cent in spring 2022. Conversely, only 14 per cent of respondents intend to reduce their construction investment this year (compared with 20 per cent in the previous survey conducted in autumn 2021). Accordingly, the importance of construction investment has risen on balance to 37 points. The proportion of companies that plan to invest in equipment and machinery as well as in research and development this year has also grown on balance.

Environmental protection becoming increasingly important as an investment motive

More than 90 per cent of the firms surveyed are using their investment to replace existing fixed assets. At the same time, investment in environmental protection and in compliance with trade law requirements has become much more important. This type of investing represents the third most important investment motive for the first time since this survey was initially launched. About 60 per cent of service companies say that they intend to invest in environmental protection this year. In manufacturing the corresponding figure is 56 per cent and in construction it is 38 per cent of the firms surveyed.

In addition, more companies than before are planning to invest in expanding their production or service provision. 73 per cent of companies say that they intend to invest in expansion during the current year, which is a new high compared with previous surveys. The corresponding figure was 69 per cent in the survey conducted in autumn 2021. Expansion investment increases the capital stock and, therefore, production capacity, which is why it can be interpreted as an indicator of companies’ growth expectations. Firms invest in expanding their facilities above all when they expect demand to rise. The larger proportion of companies that plan to make expansion investments thus indicates positive demand stimulus.

Investment-inhibiting uncertainty declining slightly

This positive demand stimulus is also reflected in companies’ confidence that they will realise their investment plans during the current year, which on balance has increased slightly compared with their assessments in autumn 2021 (see Chart G 13). In spring 2022, around 93 per cent of firms rated their investment plans for 2022 as being either certain or very certain (compared with 91 per cent in autumn 2021 for the following year). Conversely, the proportion of companies that consider their investment plans for 2022 to be either uncertain or very uncertain has fallen from 9 per cent in autumn 2021 to 7 per cent in spring 2022. This means that investment-inhibiting uncertainty has decreased slightly overall. This is noteworthy to the extent that the current geopolitical situation – with Russia’s invasion of Ukraine – will have given rise to greater uncertainty.