Manufacturing (Germany):
More optimistic export expectations

The firms in manufacturing judged their current business situation far more positively than in the previous month; in the capital goods field the most recent high level of December 2006 was reached again. Incoming orders and production expanded. Also order stocks grew and were above normal levels. Little change was reported in the somewhat high inventory levels. The business expectations still reflect a clear confidence, particularly among capital goods producers; with regard to future export business, optimism has even grown. Production plans are increasingly expansive, but manufacturers of durable consumer goods intend to cut back production in light of declining demand. Also the share of enterprises that plan to increase staff levels increased again. According to the survey responses the rise in prices will continue in the coming months. Also in manufacturing in the new federal states, the business situation was again assessed a little more favourably. With regard to the six-month outlook, optimism increased again although the survey participants expect that impulses from exports will weaken. Production is expected to expand, but employment plans have been revised downwards.