ifo Business Climate Index for Eastern Germany Rises Sharply (March 2021)
Sentiment among companies in eastern Germany improved greatly in March. The ifo Business Climate Index for the entire regional economy climbed to 94.9 points from 91.0 points in February. The survey participants’ assessments of the current situation improved markedly, and pessimism regarding future expectations also ebbed.
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In eastern German manufacturing, the upward trend of recent months intensified and the business climate brightened noticeably in March. Manufacturers assessed their current business as much better than in the previous month, once again raising their expectations for the next six months considerably.
The ifo Business Climate Index climbed significantly in the eastern German services sector in March. The service providers surveyed raised both their assessments of the current situation and their business expectations substantially.
The mood in eastern German trade improved noticeably, with a surge in the business climate indices for both wholesale and retail trade. All sub-indicators were on an upward trajectory.
In eastern German construction, the business climate turned much brighter in March. The construction companies surveyed raised both their assessments of the current situation and their business outlook very significantly.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
| 03/20 | 04/20 | 05/20 | 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | |
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| Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
| 03/20 | 04/20 | 05/20 | 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | |
| Eastern Germany | |||||||||||||
| Manufacturing | |||||||||||||
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| Construction |
Source: ifo Business Survey.
© ifo Institute
The ifo Business Climate Eastern Germany is based on approx. 1,700 monthly survey responses from firms in manufacturing, construction, wholesale, and retail. The firms are asked to give their assessments of the current business situation and their expectations for the next six months. They can characterize their situation as “good,” “satisfactory,” or “poor” and their business expectations for the next six months as “more favorable,” “unchanged,” or “more unfavorable.” The balance value of the current business situation is the difference of the percentages of the responses “good” and “poor”; the balance value of the expectations is the difference of the percentages of the responses “more favorable” and “more unfavorable.” The business climate is a transformed mean of the balances of the business situation and the expectations. For the purpose of calculating the index values, the transformed balances are all normalized to the average of the year 2015.
