The Ifo Business Climate Index for German industry and
trade fell in October for the sixth time in succession. Companies again
expressed growing dissatisfaction with their current business situation.
The business outlook nevertheless remained unchanged at last month’s
low level. The clouds over the German economy are darkening.
In manufacturing last month’s deterioration in the business
climate continued in October. Assessments of the current business
situation were significantly poorer and now approximately correspond to
the long-term average value. Business expectations recovered slightly
for the first time in six months and are less pessimistic. According to
manufacturers’ reports capacity utilization rates were considerably
lower than in the previous quarter. This marks the third drop in
succession.After staging a recovery last month, the business climate index in both retailing and wholesaling dropped this month. The retailers surveyed were much more satisfied with their current business situation, but expressed far greater pessimism about their six-month business outlook. Wholesalers reported slightly improved expectations, but their assessments of the current business situation cooled down significantly.
In construction the business climate indicator fell further. Although the construction companies surveyed expressed less pessimism about their six-month business outlook, they were far less satisfied with their current business situation.
Hans-Werner Sinn
President of the Ifo Institute
Uwe Falkenberg, owner of
Falkenberg Solutions
Real Estate Consultants
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