Taken from the official translation of the German Sustainable Development Strategy
The value of gross fixed capital formation is determined by the Federal Statistical Office. Gross fixed capital formation comprises resident producers’ net acquisitions, i.e. acquisitions less disposals, of fixed assets, excluding depreciation. Fixed assets are non-financial produced assets that are to be used repeatedly or continuously for more than a year in the production process. These include building structures, machinery and equipment (machines, vehicles and apparatus), military weapon systems and other systems (intellectual property such as investments in research and development, software, copyrights and mineral exploration as well as livestock and crops). They also include major improvements to existing stocks of fixed assets. Gross fixed capital formation is determined within the framework of the national accounts, which are compiled in accordance with harmonised European rules and are based on all available relevant data sources. As part of the major revision of 2019 the national accounts calculations were thoroughly reviewed and revised, and the reference year was changed to 2015. As a result, nominal GDP figures are slightly lower on average than they were before the major revision of 2019. The overall economic picture, however, has remained largely unchanged.
In 2019 the ratio of gross fixed capital formation to GDP was about 21.7%, which was 3.2 percentage points below the initial value for 1991 for the entire federal territory and 1.4 percentage points lower than in the year 2000. In the short and medium term, the indicator has been moving in the right direction, with a slight increase recorded from 2015 (20.0%) to 2019 (21.7%). The price-adjusted ratio in 2019 stood at about 21.2%. The average investment ratio in Germany over the years 2009 to 2018, at 20.1%, was lower than the investment ratio for the entire OECD region (21.0 %). The difference is smaller than in the period between 1999 and 2008 (-2.1 percentage points).
The time series reveals an undulating trend in the investment ratio with a slump at the start of the millennium and, after a slight recovery, another slump in 2009 following the financial and economic crisis of 2008/2009. By 2011 investment activity had recovered, and gross fixed capital formation once again exceeded the level of the pre-crisis year. In the years from 2014 to 2019, gross fixed capital formation soared by a total of 27.5%, reaching EUR 774 billion. Since the increase in nominal GDP was somewhat lower, at 17.8%, the investment ratio increased slightly from 20.0% to 21.7 %.
With regard to investments in building projects, housing construction has recorded strong nominal growth (+69.4%) since 2010, while the growth of investments in non-residential construction, including civil engineering, in the same period was less pronounced (+41.2%) and even dipped slightly in 2012 and 2015. Investments in tangible fixed assets at current prices showed year-on-year increases of 4.9% in 2018 and 1.9% in 2019. The highest growth rates for the period from 1991 were recorded for investments in research and development as well as in software and databases. Between 1991 and 2019, their volume more than trebled.
The period from 1991 to 2018 witnessed a strong shift in investment activity from the manufacturing sector to the service sector. Whereas 30.4% of new capital investments were still being made by manufacturing companies in 1991, by 2019 this figure had fallen to just 23.5%. In 2019, 75.2% of capital investments were made by companies in the service sector; in 1991, the figure had been 67.9%. The largest single investment area was that of property and housing. In 2019, this sector alone accounted for 31.6% of all new capital investments. In 2019, 11.4% of total gross fixed capital formation was attributable to the government sector, whose investment activity is distributed among various activity classifications.