ifo Business Climate in Eastern Germany Declines Significantly (July 2021)
Sentiment among companies in eastern Germany cooled significantly in July. The ifo Business Climate Index for the entire regional economy fell to 101.4 points, down from 102.6 points in June. Compared to the previous month, companies’ assessments of the current situation jumped even as their expectations plummeted.
In eastern German manufacturing, the business climate brightened noticeably in July. Manufacturers assessed both their current business and their expectations as better than in the previous month.
The ifo Business Climate Index saw a clear dip in the eastern German service sector in July. The service providers surveyed raised their overall assessments of the current situation substantially compared to the previous month, but at the same time, their expectations tumbled.
The mood in eastern German trade worsened tangibly in July: in retail it was mainly current business that was rated less favorably, while in wholesale it was expectations that fell exceedingly sharply.
In eastern German construction, the business climate was a touch cooler in July. The construction businesses surveyed rated their current business somewhat less positively, and lowered their expectations a little compared to the previous month.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
