ifo Business Climate Saxony Rises (January 2022)

The ifo Business Climate Index Saxony rose in January. The barometer of business sentiment in Saxony’s economy rose from 97.0 to 100.5 points, bringing the downward trend of recent months to an end for the time being. This rise was due mainly to a major improvement in companies’ business expectations. The survey participants’ assessments of their current situation also improved slightly.

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The mood in Saxony’s manufacturing brightened a little in January. The companies surveyed raised their overall assessments of the current situation somewhat. Business expectations for the coming six months were slightly lower.

In Saxony’s service sector, sentiment was much improved at the beginning of the year. This was driven by survey participants’ thoroughly improved business expectations. Compared to the previous month, assessments of the current situation barely changed at all.

In Saxony’s trade, the barometer of business sentiment continued to cool, with businesses stating that they were less satisfied with their current situation. Expectations for the coming six months drifted marginally lower.

In Saxony’s construction, the ifo Business Climate Index rose slightly in January. While business expectations for the coming six months improved, assessments of the current situation remained at the previous month’s level.

Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute

ifo Business Climate in Saxony, January 2022

ifo Business Climate Saxony

(Index, 2015 = 100, seasonally adjusted)

	01/21	02/21	03/21	04/21	05/21	06/21	07/21	08/21	09/21	10/21	11/21	12/21	01/22
Climate	91.0	91.8	94.1	96.0	99.3	104.2	102.8	103.0	102.2	101.2	97.9	97.0	100.5
Situation	91.7	92.2	93.7	94.4	96.2	103.2	103.4	105.3	103.2	104.6	100.5	100.1	100.8
Expectations	90.2	91.4	94.5	97.6	102.4	105.1	102.3	100.7	101.1	97.9	95.4	94.0	100.1

Source: ifo Business Survey.
© ifo Institute

ifo Business Climate Saxony by Sector

(Balances, seasonally adjusted)

	01/21	02/21	03/21	04/21	05/21	06/21	07/21	08/21	09/21	10/21	11/21	12/21	01/22
Saxony	-3.2	-1.5	3.5	7.6	14.7	25.3	22.4	22.8	20.9	18.9	11.7	9.8	17.3
Manufacturing	6.0	12.6	15.6	17.7	18.8	22.0	23.5	21.2	17.2	14.0	14.6	7.9	8.9
Service sector	-5.8	-4.1	1.2	4.7	21.6	33.8	31.1	28.1	29.0	24.4	15.1	14.5	23.8
Trade	-18.3	-19.6	-2.5	5.4	8.5	12.1	10.5	10.6	7.4	6.9	4.6	-0.2	-1.4
Construction	-17.0	-19.5	-8.4	-2.9	-5.1	5.3	4.6	0.5	-1.9	2.2	2.6	-1.0	0.9

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.

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