The business sector’s expectations regarding the growth of the economy are revealed by the performance of investment. At the beginning of 2003 investment in high-tech capital goods had already reversed the downward trend of the previous two years, rising at an annualized rate of 17 per cent. In 2004, with profit margins widening and financial conditions favourable, purchases of machinery also picked up rapidly.
Spending on machinery and software increased by 13 per cent, compared with 6 per cent in 2003. Household expenditure rose by 4.1 per cent on an annual basis in the second half of the year; the saving rate declined further.