Manufacturing (Germany):
Climate indicator declines again

In manufacturing the current business situation worsened a bit, although the positive responses continued to dominate clearly. In the sector of consumer goods and in food and beverages an upward trend was even discernable. Demand increased again, causing order stocks to rise in spite of a higher rate of production, thus rising to more than their normal level. Inventory pressure became a bit stronger, there were no more supply bottlenecks. Business expectations reflected only cautious optimism; slight scepticism even prevailed again among materials producers for the first time in two years. The firms do not expect stronger effects on their export business from the high euro exchange rate. Production plans less frequently indicated expansion; hiring is also likely to slow, according to the panel's responses. Price increases were expected primarily in the food and beverage industry. The east German manufacturing firms rated their current business situation again a bit better than in August. Regarding the business outlook, their confidence has again weakened slightly, increasingly more impetus was once more expected from foreign demand. Plans to raise the rate of production and to increase employment were reported even more frequently.