Manufacturing (Germany):
Waning optimism

The current business situation in manufacturing was just as favourable as in July. Among producers of capital goods, positive appraisals prevail, but a slight weakening was registered for the providers of intermediate goods as well as consumer goods. Increase in demand continued albeit at a slower pace. Although production increases were strong, order reserves grew and remain above normal levels. Few reports were made of excess inventories, and capital goods producers and makers of durable consumer goods even experienced delivery bottlenecks. In the six-month outlook, the optimism that had grown somewhat in July weakened again with the exception of the food and beverage sector. Also with regard to future export business, the firms were no longer quite so confident despite the weaker euro. Almost without exception, production plans are expansive and even more so for producers of capital goods. Intentions to hire new staff were slightly less frequent than in the previous month. The survey responses also indicate that increased prices will be more widespread in the coming months. In eastern Germany manufacturers assessed their current situation somewhat less positively than in the previous month. The six-month expectations also weakened again although export expectations were more positive. Production plans still remain expansive overall although the number of these responses has again declined. Hiring propensity is also no longer quite so strong.