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Data source: Federal Statistical Office

Geographical Area: Germany

Note: 2019 to 2022 provisional and partly revised data.

This table includes additional information to the above visualized indicators, i.e. a short definition of this indicator and a description of the politically determined target values as well as explaining the political intention behind selecting this indicator.

Definition

The indicator shows the share of gross fixed capital formation relative to nominal gross domestic product (which means at current prices). This share is also referred to as the investment ratio. The level of gross fixed capital formation includes additions (that is, acquisitions less disposals without taking into account consumption of fixed capital) of fixed assets by resident economic units. Fixed assets are produced assets that are designed for repeated or continuous use in production processes for longer than a year. These include buildings and structures (dwellings, other buildings and structures), equipment (machinery, vehicles, tools including weapons systems) and other assets (intellectual property such as investments in research and development, computer software and databases, entertainment, literary or artistic originals, mineral exploration and evaluation as well as animal resources and tree, crop and plant resources). Also included are improvements on existing stocks of fixed assets that lead to a significant increase in the value of an asset and/or prolong its useful life.

Target and intention

The future strength and competitiveness of an economy depend crucially on corporate and governmental investments. For this reason, the target of the Federal Government is to promote appropriate development of the ratio of gross fixed capital formation to gross domestic product (GDP).

Data status

The data published in the indicator report 2022 is as of 31 October 2022. The data shown on this platform is updated regularly, so that more current data may be available online than published in the indicator report 2022.

Text from the Indicator Report 2022 

The value of gross fixed capital formation and GDP is determined by the Federal Statistical Office as part of national accounts. National accounts are compiled in accordance with harmonised international rules and standards, that is, the European System of Accounts (ESVG), and are based on all available, relevant data sources.

In 2021, the ratio of gross fixed capital formation to GDP was at 21.8 % for the entire federal territory, price adjusted at 21.0 %. The indicator has moved into the desired direction both in the short and medium term. Since 2015, the quota slightly increased (20.0 %). The lack of a definition for appropriate development causes a positive appearance when considering the last six data points. In comparison, the investment ratio was 3.1 percentage points below the initial value in 1991 as well as 1.4 percentage points lower than in 2000. After price adjustments, the share of gross fixed capital formation relative to GDP is 1.1 percentage points below the value in 1991. Since 1996, the average investment ratio in Germany is lower than the investment ratio for the entire OECD region (2020: 22.2 %). While the difference between 2001 and 2010 was – 2.4 percentage points on average, latter decreased in the period from 2011 to 2020 to – 1.0. In the years from 2015 to 2021, gross fixed capital formation soared by a total of 29.4 %, reaching 783.8 billion euros. Since the increase in nominal GDP was somewhat lower, at 19.0 %, the investment ratio increased slightly from 20.0 % to 21.8 %. With regard to investments in building projects, housing construction has recorded strong nominal growth (+ 92.6 %) since 2010, while the growth of investments in non-residential construction, including civil engineering, in the same period was less pronounced (52.7 %) and even dipped slightly in 2012 and 2015. Equipment investments increased by 28.0 %. The strongest growth since 1991 was recorded for investments in research and development as well as in computer software and databases. Its volume almost tripled.

The period from 1991 to 2021 witnessed a strong shift in investment activity from industry to the service sector. In 1991, 30.4 % of new fixed capital formation was still being made by enterprises of the industry sector. By 2021, this figure had fallen to just 22.4 %. In 2021, 76.3 % of fixed capital formation was made in the service branches. In 1991, this figure was still 67.9 %. The largest single investment area was that of real estate activities. In 2021 alone, this sector accounted for 33.1 % of all new fixed assets. The general government sector, whose investment activities are spread across various sectors of the economy, accounted for 12.4 % of gross fixed capital formation in 2020 and 11.9 % in 2021.

Most recent data for the German Länder in 2019 reveals, that the highest investment ratio was measured for Lower Saxony at 27.6 % and the lowest investment ratios were measured for Bremen and North Rhine-Westphalia at 15.7 % and 16.4 %, respectively.

The synoptic table provides information about the evaluation of the indicator in previous years. It shows if the weather symbol assigned to an indicator was rather stable or volatile in the past years. (Evaluation of the Indicator Report 2022 )

Indicator

8.3 Gross fixed capital formation in relation to GDP

Target

Appropriate development of the ratio, to be maintained until 2030

Year

2018

2019

2020

2021

Evaluation <p>Sonne</p>
<p>Sonne</p>
<p>Sonne</p>
<p>Sonne</p>