ifo Business Climate Eastern Germany Rises Slightly (April 2021)
Sentiment among companies in eastern Germany improved slightly in April. The ifo Business Climate Index for the entire regional economy climbed to 95.9 points from 94.9 points in March. Surveyed companies’ assessments of the current situation and business expectations both improved somewhat compared to the previous month.
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In eastern German manufacturing, the business climate cooled marginally in April. This was mainly due to manufacturing companies lowering their outlook slightly, accompanied by a slight improvement in their assessments of current business.
The ifo Business Climate Index climbed a little in the eastern German services sector in April. The service providers surveyed raised their overall assessments of the current situation perceptibly, but they also lowered their expectations slightly.
The mood in eastern German trade improved marginally. While the business climate improved significantly in retail, it cooled noticeably in wholesale. In both areas, these developments were largely driven by the indicators of the current situation.
In eastern German construction, the business climate turned a little brighter in April. The construction companies surveyed raised both their assessments of the current situation and their business outlook somewhat.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
| 04/20 | 05/20 | 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | |
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| Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
| 04/20 | 05/20 | 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | |
| Eastern Germany | |||||||||||||
| Manufacturing | |||||||||||||
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| Trade | |||||||||||||
| 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.
