Wednesday, 24 October 2012

Ifo Business Climate Continues to Deteriorate for the sixth consecutive month

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

Expo Real 2012, the international real estate conference at the beginning of October in Munich has shown that the demand for property investment opportunities in Germany however is unwavering. The yields are under pressure due to the international influx of investors. Especially properties in Berlin are in high demand because of the relative undervaluation compared to other European capitals and the recent rent increases.

Uwe Falkenberg, owner of
Falkenberg Solutions
Real Estate Consultants


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