ifo Business Climate in Eastern Germany Declines Significantly (August 2024)
The ifo Business Climate Index for Eastern Germany fell again noticeably. The barometer of business sentiment for the regional economy in eastern Germany declined to 88.2 points, down from 90.1 points in July. The eastern German companies surveyed assessed their business situation as significantly worse than in the previous month and lowered their business expectations appreciably.
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In eastern German manufacturing, the business climate improved in August. The companies surveyed assessed their current business situation as considerably better than in the previous month. Compared to the previous month, their expectations for future business development fell slightly.
The Business Climate Index in eastern Germany’s service sector fell very sharply in August. The service companies surveyed lowered the assessment of their current business significantly. Their business expectations for the coming months are noticeably more pessimistic.
In eastern German trade, the climate indicator remained at the previous month’s level. In wholesale, the business climate improved slightly, while it cooled marginally in retail. In wholesale, the business situation improved slightly, while it deteriorated somewhat in retail. Business expectations improved slightly in both sectors.
In eastern German construction, the business climate cooled slightly in August. The construction companies surveyed stated that they assessed their business situation as worse than in July. Their business expectations are more pessimistic than in the previous month.
Joachim Ragnitz und Marcel Thum
Geschäftsführer ifo Institut, Niederlassung Dresden
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
08/23 | 09/23 | 10/23 | 11/23 | 12/23 | 01/24 | 02/24 | 03/24 | 04/24 | 05/24 | 06/24 | 07/24 | 08/24 | |
Climate | |||||||||||||
Situation | |||||||||||||
Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
08/23 | 09/23 | 10/23 | 11/23 | 12/23 | 01/24 | 02/24 | 03/24 | 04/24 | 05/24 | 06/24 | 07/24 | 08/24 | |
Eastern Germany | |||||||||||||
Manufacturing | |||||||||||||
Service sector | |||||||||||||
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.