IFO's retail survey, released yesterday, predicted that retailers would slash investment due to stagnating sales. Arno Stadtler, the report's author, said: "There has never been such a long downturn in retailing."The weak survey results have called into question whether stronger export orders are feeding through to the domestic economy. But a bounce in construction, laid low by bad weather in the first three months of the year, explained most of the apparent recovery.The statement warned that the economy would not grow fast enough to reduce unemployment from its near-record level. Prices charged at the factory gate fell by 0.2 per cent last month, while their year-on-year rate of decline picked up to 0.8 per cent. Cost of living figures due later this week are expected to show inflation running at just over 1 per cent. The Economics Ministry said yesterday that Europe's biggest economy expanded by more in the second quarter of this year than it shrank in the first quarter. None was forthcoming.Sir Christopher Benson reiterated the company's plea for shareholders to support the plan as the only viable alternative. "If you vote against it there will not be a Costain and you will not be shareholders,'' he said.Battered by poor investment in property and US mining assets in the late 1980s, and by the wafer-thin margins on contracting work, Costain's shares have slumped more than 90 per cent since they peaked in 1987..

The Bundesbank is expected to cut its key money market interest rate, perhaps as early as Thursday, after new figures showing inflation and growth in Germany remain subdued. "Why are you lining your pockets with money when we haven't got a dividend?"Mr Lovell was paid a basic salary of pounds 180,000 in 1995, while Sir Christopher Benson, chairman, was paid pounds 100,000. Yesterday, shareholders repeatedly called on a representative of the Kuwaiti group to put forward an alternative proposal. The company hasn't paid a dividend since 1992.Kharafi last week argued for a reprieve of up to three months from Costain's bankers to enable counter-proposals to be drawn up It said it would consider investing further in the company. "You are the most incompetent directors ever," a shareholder said.

The proposals could see their holdings slip to as little as 5 per cent.To be approved, the rescue needed a simple majority of votes to be cast in favour. In the event, 76.5 per cent of an 83 per cent turnout were in favour of the package, which was presented by Costain's board as the only plan available for the company's survival.Alan Lovell said: "We can look forward to continuing to develop our core engineering and construction businesses in the UK and around the world, in particular with our new and existing shareholders in the Middle and Far East, our two main overseas markets.''One shareholder who attended the meeting said Costain's directors attempted to move straight to a vote on the rescue resolutions but were forced by heckling shareholders to field questions, mainly from private shareholders who were angry at the company's unwillingness to furnish them with adequate information to vote on the proposals.Shareholders also questioned salaries being paid to Costain's directors despite the poor performance of the company since, in keeping with many of its industry peers, it was brought to its knees by the recession. Alan Lovell, Costain's chief executive who had faced calls in recent days to resign, said he was already discussing shared contracts with Intria.The deal had been opposed by Costain's two largest shareholders, Kharafi, a Kuwaiti construction business, and Raymond International, from Saudi Arabia, both of which hold 19 per cent each of Costain's shares. A small group of anti-road protesters outside the hall was forcibly moved on by a police presence that far outnumbered them. Armed police were positioned on the roof of the centre and protesters were constantly recorded on video cameras.Costain is involved in the building of the controversial Newbury by-pass and the Cardiff Bay Barrage and is considered by campaigners to have a poor environmental record.The meeting had been called to rubber-stamp a proposed rescue that will see Intria, a Malaysian construction company, underwrite a three-for- one rights issue to raise pounds 73m and take up to a 40 per cent stake in Costain. Seeking to minimise bad publicity Costain banned non-shareholders, including the press, from attending the meeting.From the outset, the meeting was characterised by ill-feeling and secrecy.