ifo Media Center
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ifo Employment Barometer Falls (May 2023)
The willingness among companies in Germany to hire new staff has declined. The ifo Employment Barometer fell to 98.3 points in May, down from 100.2 points in April. “Fewer new orders and rising uncertainty are causing restraint among companies,” says Klaus Wohlrabe, Head of Surveys at ifo. “Caution is also on the rise in the service sector, which until recently had been more positively inclined.”
Jonas Hennrich
Specialist
Price Increases Level Off in Germany
Price increases in Germany are expected to slowly subside over the next few months. Accordingly, ifo price expectations fell in May to 19 points, down from 21.5 in April. In food and beverage retail, the figure also fell, but at a very high level: from 69.7 to 63.2 points. “This means inflation for consumers will fall only very slowly, because for many service providers, too, price expectations are declining sluggishly; for example, they went down in hospitality from 36.4 to 34.1, and in travel agency activities from 48.6 to 46.5 points.”
ifo Export Expectations Fall (May 2023)
Sentiment in the German export industry is markedly worse. The ifo Export Expectations fell to +1.8 points in May, down from +6.5 points in April. This is the lowest level since November 2022. “Global interest rate hikes are slowly having an effect on demand,” says Klaus Wohlrabe, Head of Surveys at ifo. “The German export economy lacks momentum.”
ifo Business Climate Index falls (May 2023)
Sentiment in the German economy has suffered a setback. The ifo Business Climate Index fell to 91.7 points in May, after 93.4 points in April. This marks the first decline after six increases in a row. Driving this development are the significantly more pessimistic expectations. Managers are somewhat less satisfied with their current situation. German companies are skeptical about the upcoming summer.
Annalí Casanueva Artís, PhD
Economist
Three Times More Unused Offices in Germany Than Before the Pandemic
Remote working is leaving many German offices empty. “Currently, 12.3% of all on-site workstations are underused on an average day because of remote working. Before the pandemic, in 2019, the figure was only 4.6%,” says ifo expert Simon Krause. “In other words, the percentage of unused workstations in offices has roughly tripled.”
Economic Experts Survey: Confidence Particularly in Political Stability (1st Quarter 2023)
In the 1st quarter of 2023, Europe and South America in particular were much more critical about overcoming economic policy challenges than in the previous quarter. A similar picture can also be seen in the assessment of political performance in these regions. In contrast, the perception in North and Central America, large parts of Asia, and East and West Africa is that both economic policy and the political situation have improved. With a few exceptions in Southern Europe, experts worldwide see a noticeable improvement in political stability in their home countries.
Food Supply Bottlenecks in Germany Continue to Ease
Supply bottlenecks at German food retailers eased in April but are still a problem for many businesses. In April, 70.4% of companies surveyed companies reported bottlenecks, down from 77.7% in March. “Despite easing supply problems, food price pressure remains high and the majority of retailers expect prices to continue rising in the short term,” says ifo expert Patrick Höppner.
German Employees Reluctant to Return to the Office
In Germany, working from home declined somewhat in the spring, from 24.7% of employees in February to 24.0% in April. “The decline has been minimal, despite discussions about returning to the office. Overall, the proportion of people working from home remains at a significantly higher level than before the pandemic,” says ifo expert Jean-Victor Alipour. In 2019, before Covid, only 10% of German employees worked from home at least some of the time.
Business Climate for Germany’s Self-Employed Clouds Over
The business climate for Germany’s self-employed has deteriorated. The “Jimdo-ifo Business Climate Index for the Self-Employed” fell to -3.2 points (not seasonally adjusted) in April, down from +1.8 points (not seasonally adjusted) in March. “In contrast to the economy as a whole, the recovery made in the previous month quickly disappeared again,” says ifo expert Katrin Demmelhuber. “Developments for the self-employed and microenterprises currently lack momentum.”
Business Expectations in Germany’s Chemical Industry Brighten Further
The ifo Business Climate in Germany’s chemical industry brightened in April. It rose to -3.1 points, up from -10.5 points* in March. There was a particular improvement in business expectations, with that indicator rising to 13.3 points – its highest level since December 2021. However, the majority of companies surveyed described their current situation as poor. “The chemical industry is deriving confidence from the easing in supply bottlenecks and lower energy prices. But this industry’s current order situation remains weak,” says industry expert Anna Wolf of the ifo Institute.
Business in the German Automotive Industry Somewhat Better
The business situation for German automotive manufacturers and their suppliers has improved slightly. In April, the indicator for manufacturers rose to 23.7 points, up from 19.3 points* in March. For suppliers, it rose to 35.2 points, up from 34.6 points*. “Automotive suppliers are still much happier with their current situation than manufacturers,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.
Material Shortages Ease in German Manufacturing
German manufacturers are having an easier time sourcing raw materials and intermediate products. In April, 39.2% of the companies surveyed reported problems, down from 41.6% in March. “That’s good news for the sector, not least because it marks a rise in new orders,” says Klaus Wohlrabe, Head of Surveys at ifo. “But the companies would surely have also been delighted if the situation had eased even more.”
ifo Business Climate Saxony Sees a Clear Rise (April 2023)
The ifo Business Climate Index Saxony rose appreciably in April. The barometer of business sentiment in Saxony’s economy climbed from 96.8 points in March to 99.4 points in April. The Saxony-based companies surveyed reported a slight improvement in the business situation from the previous month and also raised their business expectations considerably.
Fewer and Fewer German Companies Plan to Increase Prices
Fewer and fewer German companies are planning to raise their prices in the next three months. For the economy as a whole, the ifo price expectations fell to 21.5 points in April, down from 27.1 points (seasonally adjusted) in March. This marks the seventh consecutive decline. “This suggests that the wave of price increases has already peaked,” says Timo Wollmershäuser, Head of Forecasts at ifo.
ifo Business Climate Eastern Germany: Index Rises (April 2023)
Sentiment among companies in eastern Germany improved slightly in April. The ifo Business Climate Index for the entire regional economy rose to 96.5 points, up from 95.4 points in March. The companies surveyed adjusted their assessments of the current situation a little downward, while their outlook for the next six months improved considerably.
ifo Employment Barometer Rises (April 2023)
Companies in Germany are more willing to hire new staff. The ifo Employment Barometer rose to 100.2 points in April, up from 99.9 points in March. “Employment is continuing to grow, although that growth is slowing, partly because of the shrinking population,” says Klaus Wohlrabe, Head of Surveys at ifo. “The drivers of employment growth in Germany are the service providers.”
Upswing in German ifo Export Expectations (April 2023)
Sentiment among German exporters has improved noticeably. The ifo Export Expectations for manufacturing companies rose to +6.9 points in April, up from +4.1 points in March. This is its highest level since February 2022. “Robust economic development in the US and the encouraging trend in China are increasing demand for German exports,” says Klaus Wohlrabe, Head of Surveys at ifo. “After a weak start to the year, exports have been able to grow again in the second quarter.”
ifo Business Climate Index Rises (April 2023)
Sentiment in German business has improved slightly. The ifo Business Climate Index rose to 93.6 points in April, up from 93.2 points in March. This was due to companies’ improved expectations. However, companies assessed their current situation as a little worse. German business’s worries are abating, but the economy is still lacking dynamism.
