33 BUSINESS SURVEY QUARTER IV-2004 In Quarter IV-2004, business activities indicated expansion due to domestic market steady growth. The expansion was also predicted to continue on early 2005 Business Activities Business activities on expantion Next quarter I-2005, expansion was expected to continue Bank Indonesia s business survey in quarter IV-2004 whose 2025 establishments as respondents resulted an indication of business activities expansion as shown by its positive index 15.36. However, this expansion was slower than previous quarter as its index was 17.04. This slow down pattern obviously matched with the domestic business activity seasonal pattern. The business activity always lower in the fourth quarter than the third quarter on every year, even though there were two big religious days, Iedul Fitri and Christmas, on consecutive months within the quarter IV-2005. These events had been strong stimulant for domestic market to absorb business products. Most respondents mentioned the higher domestic demand as main factor of the their business expansion. Other positive factors to the better business situation were earning increased of credit interest (in finance, leasing and business services sector), a conducive weather and succeed in agricultural harvest. Indications of increasing business activities were also reflected on better performance of macro indicators such as labor utilization, company financial condition, average of utilization production capacity, access to credit, and selling price. By economic sector, almost all 9 (nine) sectors except mining and quarrying sector experienced expansion with the biggest contribution from trade, hotel and restaurant sector followed by services sector, Finance, leasing and business services sector and transportation and communication sector. Based on sub sector, all sub sectors of trade, hotel and restaurant sector and of transport and communication sector experienced expansion. Within Agriculture sector, there were several sub sectors indicated expansion i.e., farm food crops sub sector, livestock & products sub sector, fishery sub sector (of agriculture sector), fertilizer, chemicals and rubber products sub sector. The contraction in forestry was even experienced since quarter II-2003. While within manufacturing industry sector there were some sub-sectors experienced expansion or increase business activities,i.e., transport equipment, machinery & apparatus sub sector and other manufacturing products sub sector. On the next quarter I-2005, business people predicted that there would be an increase on business activities in all 9 (nine) economic sectors. The positive index (20.02) reflected this optimism. This optimism has been strengthening since early 2004, moreover since quarter III-2004 which the index always over 20. However, the increasing predicted was slightly lower than previous quarter. The increasing expectation was mainly due to the raised of demand especially domestic demand, improved of market situation, increased of earning on credit interest (finance, leasing and business services sector), conducive weather and prediction of good harvest (agriculture sector). In addition, business expectation situation within the next six months, selling price and volume of demand/order/contract expectation were also indicated improve. Sectors which accelerated the increasing business activities expectation in quarter I-2005 was manufacturing industry sector and agriculture sector. Oppositely, the transport sub sector is the only sub sector, which was expected to have contraction. Methodology The Business Survey is a quarterly survey conducted since Quarter I-1993 to seek information about business activities on current quarter and its expectation on the following quarter. Respondents are middle-upper establishments that purposively selected by its operating size, economic sector, and region. Respondents has amounted about 2,000 enterprises. Questionnaires are sent by mail to the management by either on head offices or branch offices. Data collected are processed by diffusion index or net balance method, i.e., calculating the differences between percentage of the respondents who responds increase and percentage of the respondents who responds decrease. Unchanged responses are ignored. Special for business activity, selling price and the usage of labor, calculations were done by weighted net balance. As a Weighted is each sector share to GDP (2000 prices).
Graph 1. Business Activities % WNB 40 30 20 10 0-10 -20 I II III IV I II III IV I II III IV I II III IV I II III IV I* 2000 2001 2002 2003 2004 2005 Business Survey Realization Business Survey Expectation Selling Price All sector indicated had an increased...and selling price increase will be continued on next quarter The selling price / tariff / interest rate in quarter IV-2004 was predicted to increase as showed by index 16.51. Compared to the previous quarter, this increase experienced acceleration. All (9 (nine)) sectors experienced an increase of selling price with the biggest contribution from mining and quarrying sector followed by agriculture sector and trade, hotel and restaurant sector. In supply side, rise in selling price was mainly caused by the rise of raw / supporting material price and operational cost. As information that in this reported quarter PT.Pertamina (state owned oil and gas company) increased LPG price for about 40%. A small part of respondent also said that rise of promotion cost, labor cost, interest rate and exchange fluctuation influenced the increase of selling price. In demand side, rise of price was motivated by rise of demand as an impact of seasonal factor. The selling price / tariff / interest rate in quarter I-2005 was predicted to be increase, reflected from index 23.16 higher than previous quarter index (12.06). This prediction was based on expectation of increasing material price and higher operational cost. the increasing price in the next quarter I-2005 occurred in all economic sectors and sub sectors. The Usage of Labor...just small increase in quarter IV-2004... still insignificant labor absorbtion on the next quarter I-2005 The usage of labor in quarter IV-2004 indicated a small increase as shown by index 3.52. It s index was higher than the previous quarter (3.22). Among 9 sectors, there were 3 (three) sectors experienced decrease on labor usage. Those were agriculture sector, electricity, gas and water supply sector and services sector. Mining and quarrying sector had the biggest contribution on utilization of labor. The usage of labor in the next quarter I-2005 was predicted to increase with an index 4.40 lower than quarter IV-2004 which has index 6.67. The increase was expected to occur in most of economy sectors except mining and quarrying sector and services sector. The highest increase was experienced in finance, leasing and business services sector and followed by trade, hotel and restaurant sector and manufacturing industry sector.
Utilization Production Capacity...Keep on 70% The average of utilization production capacity in quarter IV-2004 was 72.03% or increased 2.26% from previous quarter. The number of utilization production capacity reached 70% since quarter II-2004. Please notify that calculation of utilization production applied to 4 (four) economy sector which are agriculture sector, mining sector, manufacturing industry sector and electricity, gas and water sector. Financial Condition Whose good condition increased According to the respondent perceptions, the financial condition in quarter IV-2004 was in a good condition. It was reflected from the survey result, which noted 32.25, higher compared with the condition in the previous quarter (28.89). From all respondent, 37.98% declared that financial condition was good, 56.30% respondent declared constant and only 5.73% declared that financial condition was worse. Respondents who declared that financial condition was worse than previous quarter were dominated by sea transport-transport sub sector (in transportation and communication sector), quarrying sub sector (in mining and quarrying sector) and cement and non metallic mineral product sub sector (in manufacturing industry sector). Access to Credit Difficulty level decreased... In quarter IV-2004, respondents perception on credit access to banks was unchanged. The percentage or respondents who said easier and its opposite were same (14.46%) while most of them said normal 71.08%. However, as compared to the previous quarter which had an index -2.37, this condition is much better. This means that number of respondents who had difficulties in accessing credit from banks decreased. Based on 9 sectors, there were only 2 (two) sectors i.e. finance, leasing and business service sector and trade, hotel and restaurant sector which were not have difficulties in accessing credit. Major cause factors mentioned were complicated terms of credit (55.66%) followed by high interest rate and bank policy. Respondent who said that access to credit was tight dominantly came from sea transport-transport sub sector (in transportation and communication sector) and electricity sub sector (in electricity, gas and water supply sector). Business Situation Remained optimism toward current and the next six months business situation Respondent s perception toward the business situation in quarter IV-2004 indicated more optimism. It is reflected from increase of index from 27.62 in previous quarter to 33.65 in this quarter. Meanwhile, respondents stated that the business situation for the next six months was still in good condition (43.27) higher as compared to the previous quarter (35.54). Investment Investment realization was increased compared tothe first semester There was 24.69% of respondents stated that they have realized their investment plan in the second semester of 2004 or increased than first semester realization as recorded 22.95%. By purpose, many of the investments were intended to extend production capacity (45.60%). By objects, the investment
realization was mainly in forms of machinery/equipments/others (60.80%), followed by building (27.60%) and land (11.60%). By financial sources, most of investments were funded by domestic sources (71.80%). Apparently, the role of domestic financial sources showed declining trend since early of 2003 and vice versa for foreign financial sources. Specifically, portion of foreign financial sources on investments reported was mainly on range of 1%-25%. While, the portion of 26%-50% had a positive trend as well. By investment value, respondents whose higher investment was 57.40% of all respondents. Investment plan kept on rise... There will be 31.06% respondents who have plans to invest in 2005. Its main purpose was to extend production capacity (48.65%). This number was slightly higher than the same period on last year. However by looking at the value, there was an increase as shown by increasing index to 57.55 from 53.95. The high capital cost has been mentioned as the main barrier on investment plan (54.76%). Related to the improvement climate of investment, Government has designed new investment procedures and reformed related institutions. Government is also pursuing comprehensive improvement policy covering on labor rule, taxation procedure, and infrastructure development. Inflation Expectation 2005 inflation rate predicted around 7.89% Based on the latest price development on quarter IV-2004, respondents seemed to change perception that inflation rate in 2005 would be higher than what they said on the previous quarter survey. The expected inflation rate in 2005 would be around 7.89% (slightly increased than previous quarter survey result 7.37%). The announcement of Government plan to reduce fuel subsidy on the next first quarter of 2005, has been triggered such inflatoir behavior on public as it used to happen in Indonesia. There has been such indication of early anticipation of retail market by increasing prices. The modus of respondents inflation expectation rose from 5% to 10%. By the way, inflation rate in 2005 started by quite high rate as January 2005 recorded 1.43% (m-t-m) or much higher than inflation rate in January 2004 (0.42%). While in 2004, annual inflation rate was 6.40%.
Table 1. Business Activities (Weighted Net Balance -WNB) SECTORS 2001 2002 2003 2004 2005 Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I* REALIZATION Agriculture -4.49-1.23-0.21 2.30-1.85 1.58 0.44-2.66 0.72-0.99-1.54 0.00 0.08 2.21 0.67 0.83 Mining and quarrying 2.19 1.87 2.49-3.74-1.78-0.82 4.13-1.25-1.34 0.96-1.92-3.15-2.69 0.80 1.44-0.18 Manufacturing industry -2.40 2.91 0.46-1.06-4.52 5.90 0.03-3.21-1.92 1.30 2.01-1.28-2.59 1.07 5.08 1.78 Electricity, gas and water supply - - - - - - - - 0.31 0.55 0.39 0.27 0.52 0.36 0.43 0.40 Construction -0.84 1.04 0.77 1.21-1.23 0.90 0.64 0.97-1.11 0.38 0.96 0.50-0.24 0.42 0.65 0.32 Trade, hotel and restaurant 2.76 4.90 0.75 3.74-2.85-0.17 0.15 2.44-4.89-0.04 1.79 2.59-0.92 2.14 2.68 3.60 Transportation and communication 0.35 1.43 1.81 2.75 1.13 0.66 1.77-0.35 1.53 0.12 0.11 1.41-1.10 0.51 0.54 1.89 Finance, leasing and business services 4.55 6.14 5.48 4.58 2.23 3.60 3.93 3.04 1.96 1.40 3.02 3.01 2.35 3.26 3.75 3.28 Services 0.70 1.58 1.53 0.37 0.41 0.27 0.81 0.51 3.19 3.57 1.97-2.45-4.67 2.82 1.81 3.44 T O T A L 2.82 18.64 13.08 10.16-8.47 11.93 11.90-0.51-1.54 7.25 6.80 0.91-9.26 13.59 17.04 15.36 EXPECTATION Agriculture 1.17 2.74 1.60 1.60 1.06 3.81 1.29 1.47 2.81 2.66 2.01 1.69 2.39 1.73 2.03 2.66 3.58 Mining and quarrying -1.01 3.27 2.80 2.49 2.80 1.78 4.91 0.00-2.49 3.13 1.93-8.99 2.82-3.08 3.11 0.86 2.13 Manufacturing industry 4.75 9.95 7.90 4.45 1.47 7.87 4.23 1.54 3.08 5.77 6.49 2.14 3.34 3.88 6.60 4.99 3.97 Electricity, gas and water supply - - - - - - - - - 0.33 0.56 0.40 0.31 0.52 0.16 0.30 0.34 Construction 1.18 2.15 1.42 0.26-0.94 1.69 1.54 1.13 0.15 1.42 1.65 0.60 0.19 0.85 0.85 0.73 0.36 Trade, hotel and restaurant 1.99 5.66 6.95 5.78 3.16 3.90 4.42 5.74-0.08 2.25 2.82 4.11 0.11 2.70 2.68 4.94 3.21 Transportation and communication 0.88 1.91 2.59 1.45-0.15 1.31 1.42 1.97-0.34 0.35 0.33 1.62-0.07 0.77 0.71 1.94 0.40 Finance, leasing and business services 5.41 6.10 6.14 5.22 4.43 5.19 5.53 3.78 4.42 3.86 2.90 3.37 3.19 2.29 4.41 3.39 2.90 Services 1.71 1.66 1.25 0.49 0.96 1.51 1.36 0.41 1.14 1.67 0.69 1.79-0.18 0.42 2.67 0.43 3.12 T O T A L 16.09 33.44 30.65 21.73 12.80 27.05 24.70 16.05 8.70 21.44 19.38 6.72 12.10 10.06 23.22 20.25 20.02 Table 2. Average Selling Prices (Weighted Net Balance -WNB) SECTORS 2001 2002 2003 2004 2005 Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I* REALIZATION Agriculture -1.22 0.71 1.30 3.88 0.81 1.03 2.03 3.10-1.74-2.07-0.73 2.73 1.06 2.83 1.07 3.37 Mining and quarrying -1.01 1.72 0.00-4.31 3.84 4.83 2.54 2.87 4.47 0.48 1.51 1.05 1.45 3.22 4.60 4.50 Manufacturing industry 3.58 5.27 0.97 2.26 1.35-0.81 1.50 0.87 1.97-0.04 0.36 1.97 2.28 3.65 2.74 2.06 Electricity, gas and water supply - - - - - - - - 0.27 0.24 0.09 0.05 0.06 0.22 0.03 0.12 Construction 0.86 1.66 1.92 2.15 1.76 1.70 1.64 0.96 0.55 0.70 0.24 0.44 1.27 1.27 1.01 1.19 Trade, hotel and restaurant 5.91 7.46 2.44 4.55 3.76 1.24 0.87 1.64 1.17-0.59 0.75 2.05 1.32 2.98 1.68 3.22 Transportation and communication 0.91 0.64 0.78 0.98 1.55 1.16 0.10 0.21-0.27-0.32-0.42 0.32 3.74 0.10 0.18 0.74 Finance, leasing and business services 1.65 2.42 1.55 1.20 0.47 0.49-1.09-0.37-0.90-2.01-3.27-3.18-3.08-1.70-0.65 0.42 Services 3.69 4.20 2.73 2.49 2.38 2.29 1.36 1.26 2.28 1.79 1.87 1.19 0.31 1.04 1.64 0.88 T O T A L 14.37 24.08 11.69 13.19 15.93 11.92 8.95 10.54 7.79-1.82 0.40 6.62 8.41 13.60 12.30 16.51 EXPECTATION Agriculture -0.95 1.57 1.66 2.33 1.98 3.45 2.24 3.82 1.97 1.36 1.35 2.21 2.20 2.18 2.22 2.10 1.97 Mining and quarrying -1.86 3.02 0.86 0.57 0.86 2.87 2.26 0.64 1.72 1.34-0.48 1.51 2.51 3.15 2.33 1.44 1.98 Manufacturing industry 4.87 5.28 6.18 1.53 3.38 3.22 2.72 0.00 4.67 4.42 1.63 2.52 3.47 1.50 3.46 2.33 9.73 Electricity, gas and water supply - - - - - - - - - 0.20 0.12 0.09 0.15 0.12 0.00 0.08 0.12 Construction 1.72 2.24 2.62 1.12 2.24 1.09 1.14 1.54 2.20 1.50 1.20 1.02 1.32 1.82 1.41 1.22 2.12 Trade, hotel and restaurant 3.82 5.85 8.33 3.81 3.33 2.74 2.59 2.85 3.70 2.01 1.19 2.80 1.58 2.41 2.32 2.59 5.50 Transportation and communication 1.15 0.91 2.32 0.82 0.33 1.86 1.41 0.80 1.18 0.48 0.28 0.54 0.30 0.47 0.00 0.87 0.65 Finance, leasing and business services 1.47 2.17 1.66 0.65 0.77-0.36-0.25-0.14 0.63-0.71-1.81-2.37-1.51-2.04-0.55 0.32 0.08 Services 2.67 3.19 3.27 1.37 2.28 3.35 1.36 0.95 3.41 2.70 1.59 1.24 1.59 1.24 0.59 1.12 1.00 T O T A L 12.88 24.22 26.91 12.19 15.17 18.22 13.48 10.46 19.51 13.30 5.06 9.55 11.61 10.85 11.79 12.06 23.16
Table 3. The Usage of Labor (Weighted Net Balance -WNB) SECTORS 2001 2002 2003 2004 2005 Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I* REALIZATION Agriculture -0.28-1.13-0.02 0.58-0.70-0.66-0.27-1.24-1.35-0.89-0.11-1.49-1.35 0.57 0.01-0.43 Mining and quarrying 1.01 0.00 0.00-1.72-2.19-1.51-2.54-2.30-1.79-0.48 0.50-3.02-2.10-2.01-0.86 2.55 Manufacturing industry -0.86 0.06-0.03-0.19-0.50 0.04-1.74-2.58-1.47-0.86-1.72-1.27-2.13 0.63 0.59 1.61 Electricity, gas and water supply - - - - - - - - 0.00 0.00 0.04 0.10-0.06 0.00 0.05-0.14 Construction -0.95-0.26 0.32 0.69 - -0.17 0.00 0.21-0.39 0.25 0.12-0.13-0.30 0.35 0.45 0.14 Trade, hotel and restaurant -0.48 0.89 1.50 0.99 0.64-0.64 0.11 0.49-1.28 0.20 0.52 0.33-0.48-0.18 0.38 0.49 Transportation and communication 1.04 0.13-0.53 0.75-0.76 0.06 0.18 0.08-0.08-0.35 0.03-0.24 3.36-0.10 0.15 0.00 Finance, leasing and business services 1.65 1.74 1.22 1.34 0.80 0.56-0.13 0.99 0.90 1.21 2.01 0.92 1.79 2.02 1.33 1.33 Services 0.25 0.93 2.73 1.04 1.83 1.36 1.36 1.10 1.45 0.40 1.66 1.19 0.47 1.04 1.12-2.02 EXPECTATION T O T A L 1.37 2.35 5.19 3.47-0.87-0.95-3.04-3.25-4.01-0.53 3.06-3.61-0.80 2.31 3.22 3.52 Agriculture 0.76 0.50 0.02-0.10 1.39 0.41 1.42 0.65 1.06 0.55 0.53 0.24 0.98 0.13 0.99 0.92 0.82 Mining and quarrying 0.00 1.01-1.72 0.57-2.59-0.55-1.51-1.27-1.15 0.00 0.48-0.50-1.01-2.62 0.39-1.72-0.53 Manufacturing industry -0.02 1.55 1.19 1.78-1.01 0.25 0.88-1.11-0.11 1.03-0.27 0.22 0.71 1.26 0.88 1.48 1.45 Electricity, gas and water supply - - - - - - - - - -0.07 0.18 0.22 0.151 0.121 0.00 0.05 0.02 Construction 0.72 1.03 0.44 0.32 0.09 0.36 0.17 0.15-0.07 1.02 0.51 0.06-0.25 0.36 0.42-0.04 0 Trade, hotel and restaurant 1.21 1.74 1.84 1.80 1.01 2.01 1.06 1.06 0.87 0.61 1.19 1.26 1.07 1.93 1.22 2.13 1.61 Transportation and communication 0.27 0.64 0.30-0.48 0.05 0.36 0.28 0.27 0.40 0.21 0.12 0.35 0.00-0.19 0.20 0.37 0.45 Finance, leasing and business services 2.83 2.84 1.81 1.22-0.56 2.62 1.25 1.34 1.83 2.83 2.52 2.27 2.80 1.99 2.25 2.62 2.27 Services 1.60 0.49 1.63 1.82 1.66 1.36 2.29 1.52 2.15 1.24 1.39 1.24 1.39 1.24 1.19 0.86-1.68 T O T A L 7.38 9.80 5.52 6.93 0.04 6.81 5.84 2.61 4.98 7.43 6.65 5.35 5.85 4.23 7.54 6.67 4.40 Table 4. Other Indicators (In Percentage Respondent) INDICATORS 2002 2003 Q I Q II Q III Q IV Q I Q II Q III Q IV Q I QII QIII Q IV 2004 The Present Business Situation Good 29.01 31.16 31.90 32.24 28.21 28.09 30.75 34.05 28.92 32.94 35.05 40.22 Satisfactory 55.69 54.70 57.21 53.91 56.34 58.25 59.03 57.55 59.68 59.00 57.52 53.21 Bad 15.30 14.14 10.90 13.85 15.45 13.66 10.22 8.40 11.40 8.06 7.43 6.57 Net Balance (% Good - % Bad) 13.71 17.02 21.00 18.39 12.76 14.43 20.53 25.65 17.52 24.88 27.62 33.65 The Business Situation during The Next Six Months Better 46.39 43.89 36.37 36.97 35.24 34.88 36.74 34.85 36.55 37.20 38.92 46.69 Same 50.25 53.22 59.29 55.13 58.68 61.25 58.77 58.89 60.18 59.72 57.70 49.89 Worse 3.36 2.89 4.33 7.91 6.08 3.87 4.49 6.26 3.27 3.08 3.38 3.42 Net Balance (% Better - % Worse) 43.03 41.00 32.04 29.06 29.17 31.01 32.25 28.59 33.28 34.12 35.54 43.27 The Present Financial Condition Good 33.27 31.32 32.37 32.91 31.10 31.25 33.01 36.29 33.96 34.90 35.92 37.98 Satisfactory 54.97 58.38 57.01 57.13 57.69 58.67 58.44 56.34 56.62 59.08 57.05 56.30 Bad 11.76 10.30 10.62 9.96 11.21 10.07 8.56 7.37 9.42 6.03 7.03 5.73 Net Balance (% Good - % Bad) 21.50 21.02 21.75 22.95 19.89 21.18 24.45 28.92 24.54 28.87 28.89 32.25 The Present Situation Access to Credit Easy 7.58 9.06 9.88 9.13 8.78 8.70 8.92 8.96 10.45 10.25 11.43 14.46 Normal 69.66 68.89 71.28 75.91 68.71 64.69 72.43 67.38 71.88 75.10 74.77 71.08 Tight 22.75 22.05 18.84 14.96 22.51 26.62 18.65 23.66 17.67 14.65 13.80 14.46 Net Balance (% Easy - % Tight) -15.17-12.99-8.97-5.83-13.72-17.92-9.73-14.70-7.22-4.40-2.37 0.00 The Tight of Access to Credit Term credit barrier 28.03 22.64 22.08 22.08 35.77 33.00 34.30 43.53 43.09 38.75 44.86 55.66 The high interest rate 40.00 46.13 39.77 42.08 38.62 34.67 27.54 28.09 29.83 26.25 32.97 18.40 Bank policy 16.62 17.91 18.71 23.33 17.07 23.33 26.57 26.38 27.07 35.00 22.16 25.94 Others 15.35 13.32 19.44 12.50 8.54 9.00 11.59 - - - - 100.00
Table 5. Utilization Production Capacity (Percentage) S E C T O R S 2003 2004 Q I Q II Q III Q IV Tw I Tw II Tw III Tw IV AGRICULTURE 55.55 59.24 62.52 64.17 68.71 72.81 70.26 73.18 - Farm Food Crops 52.43 55.25 55.26 60.90 65.22 65.55 63.27 67.08 - Non-food Crops 57.54 64.36 73.86 70.47 79.33 88.32 79.59 83.63 - Livestock & Products 63.92 66.83 76.22 82.14 69.78 75.43 76.19 76.85 - Forestry 68.07 68.13 50.78 52.86 45.88 58.14 58.00 67.00 - Fishery 48.08 58.04 66.58 55.10 71.09 73.50 75.19 70.51 MINING AND QUARRYING 70.71 73.07 72.04 74.14 84.95 73.69 71.36 66.97 MANUFACTURING INDUSTRY 65.83 65.92 69.31 68.48 69.56 74.52 71.09 71.63 - Food, beverages and tobacco 62.32 62.38 68.36 65.93 65.35 83.95 69.38 76.85 - Textile, leather products ang footwear 80.89 71.10 71.67 69.95 76.49 75.24 73.74 73.09 - Wood products & other wood products 63.07 63.92 65.86 66.70 81.02 74.16 72.22 56.41 - Paper and printing 68.40 65.62 65.73 69.73 60.81 74.54 68.80 67.25 - Fertilizers, chemicals and rubber products 76.49 73.16 75.05 75.14 74.00 74.74 76.98 73.15 - Cement and non metalic mineral products 61.67 70.70 73.88 70.86 59.33 67.70 61.63 65.86 - Iron and basic steel 59.50 61.60 75.44 69.88 60.10 60.06 59.19 94.59 - Transport equipment, machinery & apparatus 60.23 67.71 72.88 67.29 59.31 67.86 78.44 79.29 - Other manufacturing products 55.85 59.60 62.98 65.38 64.83 71.00 69.84 70.88 ELECTRICITY, GAS AND WATER SUPPLY 87.00 79.7 62.58 93.7 56.5 64.46 62.58 75.86 T O T A L 62.43 64.04 66.70 67.60 69.67 73.63 70.49 72.03 Table 6. Investment Realization and Plan INVESTMENT REALIZED 2003 2004 2003 2004 2005 INVESTMENT PLAN Smt I Smt II Smt I Smt II Smt I Smt II Smt I Smt II Smt I Investment realized (% respondent) 25.18 23.78 22.95 24.69 Planned investment (% respondent) 25.10 30.41 23.83 31.06 Amount of the investment (SB) 42.22 49.83 47.10 57.40 Amount of the investment (SB) 53.82 53.95 50.00 57.55 Form of the investment (%) Land 9.52 8.71 9.35 11.60 Limiting factors of investment (%) Building 26.35 24.74 26.45 27.60 Insufficient demand 21.31 13.89 12.03 11.42 Machinery/equipment/others 64.13 66.55 64.19 60.80 Cost of capital too high 43.44 55.56 55.64 54.76 Sources of fund (%) Credit guarantees insufficient 6.15 6.60 4.89 8.03 Domestic 81.27 80.84 74.19 71.80 Insufficient profits 7.79 5.56 8.27 9.30 Foreign : 1-25% 8.89 10.10 12.90 10.00 Fear of bankruptsy 4.10 2.78 2.26 2.54 Foreign : 26-50% 2.54 2.44 4.19 7.20 Technical factors 17.21 15.63 16.92 13.95 Foreign : 51-75% 3.17 3.48 1.94 5.20 Foreign : >75% 4.13 3.14 6.77 5.80 Purpose of investment (%) Purpose of investment (%) Extending production capacity 39.93 35.89 40.00 45.60 Extending production capacity 39.17 40.33 45.96 48.65 to increase efficiency 15.10 19.51 16.45 15.20 to increase efficiency 16.56 20.16 18.94 19.87 Replacement 19.13 25.44 22.58 19.20 Replacement 23.89 22.07 19.25 15.26 Mechanization/automation 3.69 1.05 2.90 2.80 Mechanization/automation 3.82 0.82 2.48 1.91 Introduction of new production techniques 7.72 7.67 6.13 4.40 Introduction of new production techniq 9.24 10.63 8.07 8.74 Other 14.43 10.45 11.94 12.80 Other 7.32 5.99 5.28 5.56