ifo Media Center
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Business Climate for Germany’s Self-Employed Worsens
The business climate for Germany’s self-employed has deteriorated for the fourth time in a row, finds the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). The index fell to -16.4 points* in July, down from -12.6 points in June. “Germany’s economy is going through a weak phase,” says ifo expert Katrin Demmelhuber. “The country’s self-employed cannot escape this.”
Fewer Supply Bottlenecks in German Retail
In food and beverage retail, many companies remain affected by supply problems: 69.9% of businesses reported this in July, down from 79.7% in June. Among car dealerships, the figure was 53.4%; in June, this figure was 60.9%. In clothing, toy, and furniture retail, only just under 20.0% of businesses were affected.
Material Shortages Continue to Ease in German Manufacturing
German manufacturing is facing fewer and fewer problems with material shortages. In July, 29.5% of the companies surveyed reported shortages, down from 31.9% in June. “The situation has been easing steadily for more than a year,” says Klaus Wohlrabe, Head of Surveys at ifo, “although bottlenecks still exist for some electronic components.”
Business Climate in Germany’s Chemical Industry Brightens Only Marginally
The ifo Business Climate in Germany’s chemical industry has improved only slightly. The indicator climbed from minus 28.1 points in June to minus 25 points, according to the ifo Institute survey. The industry’s assessment of its business situation and expectations remained extremely negative at -26.1 and -23.9 points, respectively. “Although the rapid decline in the chemical industry has stopped for now, there’s no sign of a recovery happening any time soon,” says industry expert Anna Wolf of the ifo Institute.
German Automotive Industry Sees Fewer Orders
German automakers and their suppliers view their current business situation as worse than in the previous month, according to the ifo Business Survey. The indicator fell to 23.6 points in July, down from 27.1 points in June. “Orders are currently slow for automakers and their suppliers,” says Anita Wölfl, a specialist at the ifo Center for Industrial Organization and New Technologies. “In light of persistent uncertainty in the global markets, the automotive industry’s expectations for the coming months also remain at a low level.”
Artificial Intelligence in Use at 13.3% of Companies in Germany
In Germany, 13.3% of companies are currently using artificial intelligence (AI), and 9.2% are planning to use it. A further 36.7% of all companies surveyed are discussing potential use cases. “The majority of all companies in Germany are currently looking into AI,” says industry expert Anna Wolf of the ifo Institute. AI-based systems process large amounts of data using algorithms to make quick decisions via automated data analysis.
ifo Business Climate Saxony Still Declining (July 2023)
In July, the ifo Business Climate Index Saxony dropped notably. The barometer of business sentiment in Saxony’s economy fell from 94.2 points in June to 92.0 points in July. The Saxony-based companies surveyed assessed their current business situation as considerably worse than in the previous month and scaled back their business expectations somewhat. This is the second consecutive decline in the business climate.
Economic Experts Survey: High Increases in House Prices Expected Worldwide (Q2 2023)
How do economists view the future of the real estate market? The latest Economic Experts Survey (EES) conducted by the ifo Institute and the Institute for Swiss Economic Policy (IWP) examines economists’ house price expectations on a global level.
ifo Business Climate Index Eastern Germany Falls Further (July 2023)
Sentiment among companies in eastern Germany fell once again in July. The Business Climate Index for the entire regional economy dropped from 93.4 to 91.4 points. This means that the barometer of business sentiment fell for the third time in a row. Survey participants were noticeably less satisfied with their current business and slightly scaled back their business expectations for the coming six months.
Price Expectations of Companies in Germany Marginally Higher
German companies’ price expectations for the coming months have risen marginally, finds the ifo Institute’s survey. They rose to 16.4 points in July, up from 16.3 points in June. “For the first time since October 2022, the share of companies planning to raise their prices has on balance not declined further,” says Timo Wollmershäuser, Head of Forecasts at ifo. A growing majority of the companies surveyed are planning further price increases, especially among retailers (34.8 points, up from after 32.9 points) and consumer-related service providers (32.9 points, up from 32.7 points). “This makes it likely that the decline in domestic inflation in particular will take a little longer,” Wollmershäuser adds.
ifo Employment Barometer Falls (July 2023)
The willingness among companies in Germany to hire new staff has declined sharply. The ifo Employment Barometer fell to 97.1 points in July, down from 98.3 points in June. “At present, positive and negative responses balance each other out exactly,” says Klaus Wohlrabe, Head of Surveys at ifo. “Virtually all industries are becoming more cautious about taking on new hires.”
Germany’s Export Expectations Dip Slightly (July 2023)
Sentiment in the German export industry has deteriorated slightly. The ifo Export Expectations slipped to -6.0 points in July, down from -5.9 points in June. “Demand from abroad is developing rather weakly,” says Klaus Wohlrabe, Head of Surveys at ifo. “This is also the result of restrictive monetary policy in the US and Europe, the effects of which are gradually being felt.”
ifo Business Climate Index Falls for Third Consecutive Month (July 2023)
Sentiment among German companies has worsened further. The ifo Business Climate Index fell to 87.3 points in July, down from 88.6 points in June. This is its third consecutive fall. In particular, companies were notably less satisfied with their current business. Expectations were also lower. The situation in the German economy is turning bleaker.
Economic Experts Survey: Inflation Expectations Remain High Worldwide (Q2 2023)
How are economists’ expectations for future price developments unfolding worldwide? Are the central banks’ major interest rate hikes having an impact, and can we observe a decline in inflation expectations? The latest wave of the Economic Experts Survey (EES) conducted by the ifo Institute and the Swiss Economic Policy Institute examines economists’ inflation expectations at the global level. The result: inflation expectations remain at a high level worldwide. Even though it is true that the expected inflation rate for 2023 has declined slowly over the past three quarters, there have been no noticeable changes compared with the previous wave of the EES survey (first quarter of 2023).
Cloud Computing in Use at 46.5% of Companies in Germany
Among German companies, 46.5% are currently using cloud computing technology for their business processes, while 11.1% are planning to. A further 18.2% of all companies surveyed are still discussing whether or not to introduce the technology. “Cloud computing has clearly established itself as a key component of modern IT infrastructure at German companies,” says industry expert Anna Wolf of the ifo Institute. In cloud computing, IT resources such as software, storage, and computing power are made available via the internet. Companies use this technology to optimize their business processes.
Business Climate for Germany’s Self-Employed Clouds Over
The business climate for Germany’s self-employed has deteriorated, finds the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). The index fell to -12.6 points* in June, down from -8.6 points* in May. “There’s a kind of domino effect at work here,” says ifo expert Katrin Demmelhuber. “Since many large companies are short of orders, they’re also placing fewer orders with the self-employed.”
Personnel Policy Implications Due to Demographic Change (2nd Quarter 2023)
In the second quarter of 2023, the Randstad ifo Personnel Manager survey explored demographic change and its impact on HR policy, as well as the role of older employees now and in the near future.
More Supply Bottlenecks in German Food Retail
The proportion of food retailers in Germany with supply problems has increased. In June, 79.7% reported bottlenecks, up from 65.8% in May. “Retailers are still in difficult negotiations with manufacturers on prices and conditions for certain goods. Supply freezes by manufacturers and the delisting of certain products by retailers are some of the ways the players are exerting pressure,” says ifo expert Patrick Höppner.
Material Shortages Ease in German Manufacturing
German manufacturing is seeing fewer material shortages. In June, 31.9% of the companies surveyed reported shortages, down from 35.3% in May. However, this is still much higher than the long-term average of 15.2%. “Unfortunately, the easing does little to counteract the darkening mood in manufacturing,” says Klaus Wohlrabe, Head of Surveys at ifo. “Companies can process their existing orders faster, but they are currently receiving too few new ones.”
Situation Much Better for German Automakers
The current business situation for German automotive manufacturers has improved significantly. In June, the indicator climbed to 37.5 points, up from 28.4 points* in May. Expectations, however, fell to -56.9 points, down from -10.3 points* in May. “Automakers are experiencing great uncertainty, comparable to the early days of the war in Ukraine or to when the risk of gas rationing in manufacturing shot up last fall,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.
