[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-565488-105":3,"detail-sidebar-cat-1-en-105":80,"doc-detail-565488-en":126},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":73,"head_meta":75,"extra_data":77,"updated_unix":79},105,"en","box-7-factors-behind-the-weakness-in-investment-by-type-of-product","Box 7 - Factors behind the weakness in investment by type of product","","Box 7 reviews recent investment developments by product type to explain drivers of weak aggregate investment, using data available only through Q3 2002. Overall investment weakness since early 2001 is widespread, but the underlying causes differ. Construction declines reflect structural and cyclical forces, especially housing corrections and uncertainty affecting households. Equipment investment weakness is linked to low demand, economic uncertainty, weaker profits and internal finance, and financing constraints. Country-specific fiscal and volatility effects are noted across subcategories.",{"@graph":14,"@context":72},[15,34,55],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/presentations/","Presentations",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/box-7-factors-behind-the-weakness-in-investment-by-type-of-product/565488/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/box-7-factors-behind-the-weakness-in-investment-by-type-of-product/565488.png","ImageObject",442,249,{"name":42,"@type":43},"dawugda","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-22","2026-10-13",true,{"@type":52,"interactionType":53,"userInteractionCount":30},"InteractionCounter",{"@type":54},"ViewAction",{"@type":56,"mainEntity":57},"FAQPage",[58,64,68],{"name":59,"@type":60,"acceptedAnswer":61},"What does Box 7 examine regarding investment in 2002?","Question",{"text":62,"@type":63},"It reviews recent investment developments by product type to identify factors influencing aggregate investment. The analysis is based on data available only up to the third quarter of 2002.","Answer",{"name":65,"@type":60,"acceptedAnswer":66},"Why did construction investment weaken in the euro area?",{"text":67,"@type":63},"Construction investment weakened due to both structural and cyclical factors. Housing falls were linked to post-unification corrections and households deferring decisions under uncertainty.",{"name":69,"@type":60,"acceptedAnswer":70},"What factors dampened equipment (non-construction) investment?",{"text":71,"@type":63},"Weak equipment investment reflected low demand growth and economic uncertainty, along with reduced corporate profits that impair internal financing. Financing difficulties and high indebtedness also led firms to postpone investment.","https://schema.org",{"og:url":32,"og:type":74,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":76,"canonical":32},"index,follow",{"doc_id":78,"site_id":7},565488,1792338300,{"code":4,"msg":81,"data":82},"success",[83,87,92,97,102,107,112,117,122],{"id":84,"doc_module":22,"doc_module_name":25,"category_name":29,"show_sort_weight":85,"slug":86},11,90,"presentations",{"id":88,"doc_module":22,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},12,"Resumes",80,"resumes",{"id":93,"doc_module":22,"doc_module_name":25,"category_name":94,"show_sort_weight":95,"slug":96},14,"Invoices",70,"invoices",{"id":98,"doc_module":22,"doc_module_name":25,"category_name":99,"show_sort_weight":100,"slug":101},15,"Posters",60,"posters",{"id":103,"doc_module":22,"doc_module_name":25,"category_name":104,"show_sort_weight":105,"slug":106},16,"Social Media",50,"social-media",{"id":108,"doc_module":22,"doc_module_name":25,"category_name":109,"show_sort_weight":110,"slug":111},17,"Forms",40,"forms",{"id":113,"doc_module":22,"doc_module_name":25,"category_name":114,"show_sort_weight":115,"slug":116},18,"Letters",30,"letters",{"id":118,"doc_module":22,"doc_module_name":25,"category_name":119,"show_sort_weight":120,"slug":121},21,"Paper Templates",5,"papers-templates",{"id":123,"doc_module":22,"doc_module_name":25,"category_name":124,"show_sort_weight":4,"slug":125},158,"General","general-158",{"code":4,"msg":81,"data":127},{"doc_id":78,"user_id":128,"nickname":42,"user_avatar":129,"doc_module":22,"category_id":84,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":30,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":26,"language":135,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":12,"update_tm":139,"read_time":22},3985747870947,"https://ap-avatar.wpscdn.com/davatar_3d24733baf745e90a7e4bdd5f77d97b2","Box 7  \nFactors behind the weakness in investment by type of product  \nThis box reviews recent developments in investment by type of product in order to shed light on the various factors influencing aggregate investment (see Box 6 of the September 2002 issue of the ECB’s Monthly Bulletin for a discussion of the data on the breakdown of investment) . Data are only available up to the third quarter of 2002. It appears that the weakness in overall investment observed since the beginning of 2001 has been broadly based across the various components. However, the factors accounting for this weakness have differed between products. In particular, both structural and cyclical factors are likely to account for the recent declines in construction investment. By contrast, low growth rates in equipment investment seem to be the result of the current environment of weak GDP growth and uncertain prospects.  \nWeak construction investment as a result of structural and cyclical factors  \nStarting with construction, housing investment (around half of construction investment and 25% of total investment) fell further in the third quarter of 2002, by 0.4% quarter-on-quarter, continuing a two-year decline (see Chart A). In that quarter, the level of housing investment was 6% below its peak of the second quarter of 2000. Structural factors, in particular the ongoing correction of the post-unification boom in the construction sector in Germany, have dampened growth in euro area housing investment over the past few years. More recently, uncertainty about the economic outlook, and thus about employment and income prospects, may have led households and property investors to defer housing investment decisions.  \nNon-housing construction, which comprises office, public and industrial buildings and civil engineering, has also shown protracted weakness since the mid-1990s, similar to that observed for housing investment. An overcapacity of office buildings in some parts of the euro area has tended to dampen growth in non-housing construction investment over the past years. More recently, the level of non-housing construction has declined. From the second quarter of 2001 to the third quarter of 2002 it decreased by 2% in cumulative terms. In addition to structural factors, weak activity and uncertain prospects are likely to have deterred companies from seeking new offices and production sites in the past few quarters. Moreover, in some euro area countries, budget constraints may have limited the scope for public investment projects.  \nUncertainty about economic prospects and profits dampened equipment investment  \nTurning to non-construction investment (also referred to as “equipment investment”), the latest data suggest that the pattern of weak growth observed since 2001 has continued, albeit possibly to a lesser extent (see Chart A) . This reflects a range of factors, in particular low growth in demand and economic uncertainty. Business expectations in the manufacturing sector have remained at relatively low levels throughout the past two years. Moreover, the protracted economic slowdown has adversely affected corporate profits, and thereby internal finance. The problems faced by firms in financing their investment plans may have been compounded by two additional factors. First, raising funds from securities markets or borrowing from financial intermediaries may have become more difficult for a number of firms in recent quarters. Second, companies with a high level of indebtedness may have opted to postpone investment as a means to improve their balance sheets.  \nAs regards developments in investment for each of the main types of non-construction product, investment in metal products and machinery (30% of total investment) increased in the third quarter of 2002, after six consecutive quarters of decline (see Chart B) . These results should be interpreted with caution, however. Fiscal incentives raised equipment investment in Italy in the second half of las","cbCaid7GW3l7CTqL","https://ap.wps.com/l/cbCaid7GW3l7CTqL","pdf",102168,"English","# Factors behind the weakness in investment by type of product\n## Weak construction investment as a result of structural and cyclical factors\n## Uncertainty about economic prospects and profits dampened equipment investment","[{\"question\":\"What does Box 7 examine regarding investment in 2002?\",\"answer\":\"It reviews recent investment developments by product type to identify factors influencing aggregate investment. The analysis is based on data available only up to the third quarter of 2002.\"},{\"question\":\"Why did construction investment weaken in the euro area?\",\"answer\":\"Construction investment weakened due to both structural and cyclical factors. Housing falls were linked to post-unification corrections and households deferring decisions under uncertainty.\"},{\"question\":\"What factors dampened equipment (non-construction) investment?\",\"answer\":\"Weak equipment investment reflected low demand growth and economic uncertainty, along with reduced corporate profits that impair internal financing. Financing difficulties and high indebtedness also led firms to postpone investment.\"}]","Box 7 - Factors behind the weakness in investment by type of product | PDF",1791854967]