ifo Business Climate Saxony Falls Slightly (January 2021)
The ifo Business Climate Index Saxony dropped slightly at the start of 2021. The barometer of business sentiment declined from 91.6 to 90.5 points. The businesses surveyed lowered their assessments of the current situation and their business expectations somewhat compared to the previous month.
In January, the mood in Saxony’s manufacturing saw a marked improvement. The outlook for the coming months brightened considerably, and assessments of the current situation improved slightly. Capacity utilization rose to 81.0 percent, which is only slightly below the long-term average of 81.7 percent.
In Saxony’s service sector, the Business Climate Index slipped once again in January. Assessments of the current situation and business expectations both declined somewhat.
Sentiment in Saxony’s trade plunged in January, a change largely attributable to the nosedive the mood in the retail sector took. Retailers’ assessments of the business situation and business expectations plummeted, and wholesalers’ sentiment also clouded over.
In Saxony’s construction industry, the business climate fell significantly in January. This was mainly due to lower assessments of the current situation by the construction companies surveyed. Business expectations for the coming six months also darkened noticeably.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Saxony
(Index, 2015 = 100, seasonally adjusted)
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Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Saxony by Sector
(Balances, seasonally adjusted)
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Source: ifo Business Survey.
© ifo Institute
The ifo Business Climate for Saxony is based on approx. 500 monthly survey responses from businesses in manufacturing, the service sector, trade, and construction. Companies are asked to give their assessments of the current business situation and their expectations for the next six months. They can describe their situation as “good,” “satisfactory,” or “poor” and their business expectations for the next six months as “more favorable,” “unchanged,” or “less favorable.” The balance value of the current business situation is the difference in the percentage shares of the responses “good” and “poor”; the balance value of the expectations is the difference in the percentage shares of the responses “more favorable” and “less favorable.” The business climate is a transformed mean of the balances of the business situation and the expectations. To calculate the index values, the transformed balances are all normalized to the average for the year 2015.
