Friday, 24 July 2009

German Economy: Business Climate Improved Again

The German Business Climate improved for the fourth consecutive month:

The Ifo Business Climate Index for industry and trade in Germany rose again in July. The firms are no longer quite so dissatisfied with their current business situation as in the previous month. They are again less sceptical regarding business developments in the coming half year. It seems that the economy is gaining traction.

In manufacturing the business climate has improved. The firms report a business situation that is no longer quite so poor. With regard to the business outlook their estimations are yet again less critical. Their scepticism regarding foreign business has also weakened further. The utilisation of available machinery and equipment has, since Spring, not been further reduced, but overall the utilisation rate of technical capacities is clearly below average. The manufacturers have made little change in their personnel plans and intend to reduce staff further.

The business climate in wholesaling has brightened. The survey participants have assessed their current business situation less negatively. Also with regard to the business outlook, their pessimism has abated. Retailers have appraised their current business situation clearly more favourably than in the previous month and have ranked it as nearly satisfactory. Their business expectations for the coming half year, however, are more dampened than they were in June. For this reason, the business climate index in retailing has fallen slightly.

In construction the business climate is somewhat more favourable. The contractors are less dissatisfied with their present business than they were in June. Their caution regarding the six-month business outlook has weakened somewhat.

Hans-Werner Sinn
President of the Ifo Institute for Economic Research at the University of Munich

Detailed material including Graphs and Tables are available on the ifo-website.

The investnent climate for property or real estate investments in Germany is favourabel and the demand not only by opportunists is increasing. For support on property search and investment contact Berlin Portfolio.


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