Manufacturing (Germany):
Improved order situation

The current business situation in German manufacturing was assessed clearly more positively than in the previous month and reached a value last reported at the beginning of 1991. Only in the food industry did the situation worsen. Demand and production increased at an even faster rate; order reserves were above normal levels, on the whole. Very few complaints were voiced about excess inventories and consumer goods producers even reported delivery bottlenecks. With regard to business expectations, however, reduced optimism was expressed and in the capital goods sector it was only very weak. With regard to export business, however, the enterprises expressed more confidence than in the previous month, also manufacturers of capital goods. Production plans are now more expansive. According to the survey responses, prices in the coming months will continue to rise at an even faster pace, especially for intermediate goods. In contrast, the industrial firms in eastern Germany assessed their present situation a little less favourably than in the previous month, but more confidence was expressed in the business outlook. Although they expect more impulses from foreign demand, their production plans are not as frequently expansive as before especially since they are no longer as satisfied with their current order stocks. The employment situation will continue to improve, however, in the coming months.