Wednesday, 26 August 2009

August 2009 German Ifo Business Climate Improved again

Ifo Business Climate Brightens Again
Results of the August 2009 Ifo Business Survey

The Ifo Business Climate for industry and trade in Germany improved once again in August. For the second time in succession the firms have assessed their current business situation clearly less negatively. However, in comparison to conditions one year ago, the situation of the firms is still considerably worse at the moment. With regard to business developments in the coming half year, the survey participants are less sceptical than in July. The German economy is slowly recovering from its descent.

In manufacturing the business climate is less unfavourable than in the previous month. Some easing of the difficult business situation has occurred, according to the survey responses. Nevertheless, on the whole the firms are dissatisfied with current business, but they no longer expect a worsening in the coming half year. The manufacturing firms have also given less sceptical assessments of their export opportunities. Planned reductions of their staff levels are no longer quite so sharp. Still, their plans remained clearly geared towards cuts in employment.

The business climate in wholesaling has clearly improved. The current business situation has been assessed noticeably less sceptically by the firms than in the previous month. The wholesalers are also less reserved with regard to the six-month outlook. In retailing the business climate index has risen somewhat. Although the retailers are again slightly more dissatisfied with their current business situation, they are less pessimistic regarding business developments in the coming six months.

In construction the business climate has brightened somewhat. The survey participants have assessed their present business slightly more favourably than in the previous month. With regard to future business, their caution remains largely unchanged.

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 overall picture for the developments in Germany in July 2009 looks promising continues on in August:
Business Climate July 2009- up link
Consumer Climate July 2009 - up link
Unemployment July 2009 - lower than feared link

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