ifo Business Climate Eastern Germany Continues to Rise Steeply (June 2021)
Sentiment among companies in eastern Germany once again improved strongly in June. The ifo Business Climate Index for the entire regional economy jumped to 102.7 points from 99.2 points in May. Compared to the previous month, companies’ assessments of the current situation surged. Their expectations also improved significantly. Developments among trading companies were particularly positive.
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In eastern German manufacturing, the business climate brightened substantially in June. Manufacturers assessed both their current business and their expectations as much better than in the previous month.
In the eastern German service sector, the ifo Business Climate Index jumped higher. The service providers surveyed raised their overall assessments of the current situation substantially, and their expectations also rose steeply.
The mood in eastern German trade improved immensely in June, mainly because business was much better. Expectations rose very significantly in wholesale and modestly in retail.
In eastern German construction, the business climate turned a lot brighter in June. The construction businesses surveyed rated their current business much more positively. They also raised their expectations somewhat compared to the previous month.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
| 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | 05/21 | 06/21 | |
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| Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
| 06/20 | 07/20 | 08/20 | 09/20 | 10/20 | 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | 05/21 | 06/21 | |
| 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.
