In its recent investment survey, WIFO asked approximately 2,600 firms of the manufacturing sector, the construction sector and the energy sector about their plans for future investments, the development of sales, as well as their business expectations. Due to sluggish export demand as a result of the economic crises in Asia, Russia and South America, falling prices in raw materials and the resulting uncertainty in financial markets, WIFO predicts a slow-down of overall growth in real GDP from 3.3 percent in 1998 to 2.2 percent in 1999. Due to the small increase in building investments, expansion of real gross investment in fixed assets will be reduced to 3.8 percent in 1999, after an increase of 4.7 percent in 1998. Austrian manufacturing experienced a major downturn in the last quarter of 1998, and in the first half of 1999 demand was similarly weak (–3.0 percent). WIFO forecasts a growth in real production of only 2.0 percent for 1999 assuming that it will increase in the second half of 1999. The WIFO business survey shows that business confidence has been improving since March 1999. The share of firms expecting a rise in production steadily increased during recent months. However, order stocks, and especially export orders, are still judged pessimistically and the share of pessimistic firms is significantly higher than the long-term average. Accordingly, a large number of the surveyed firms revised their investment plans for 1998 downwards and postponed investments to 1999. Despite the projected slow-down of demand in 1999, manufacturing firms plan to increase their investments by 23.7 percent. Considering the fact that investment plans are subject to frequent revision, WIFO forecasts an increase by 18 percent of nominal investment. In the medium run, stable exchange rates (introduction of the euro), low interest rates, cheep raw materials, the continued fall in unit labour costs vis-à-vis the main trading partners and satisfactory profits provide an excellent climate for further investments. Despite slow growth in 1999, manufacturing firms plan to invest heavily. Investment will have the greatest dynamism in the chemical industry (+58.7 percent), in industries related to the construction sector (+54.0 percent) and technical goods (machinery, electronics, transport equipment; +21.5 percent). Consumer goods industries likewise plan to increase their investments (+12.4 percent). Basic industries have been badly hit by falling raw material prices and declining demand. For 1999 they expect a major reduction in sales (–9.2 percent), and they accordingly reduced their investment plans for 1999 (–0.8 percent). The business climate within the construction industry varies. Demand is growing in some sectors, especially civil engineering and renovation, but has been sluggish for several review periods in housing construction. Plans for investment in equipment differ widely from firm to firm. For the industry as a whole, no further increase is expected. Electric utilities revised their original investment plans for 1998 significantly downwards and now report a decrease of –7.4 percent. For 1999 a reduction of 13.8 percent has to be expected as well. The "Verbundkonzern", Austria's largest electricity producer, confirms massive cuts in its investment outlays. Transport firms and power utilities plan to increase their investments by 5.6 percent.