Manufacturing (Germany):
Weakened optimism

The current business situation in manufacturing trended slightly downwards. This was due to the less favourable appraisals of intermediate goods producers and manufactures of consumer durables; positive assessments prevailed in capital goods, non-durable consumer goods and food and beverages. On average, more new orders were on hand than in the previous month and production was expanded even further. Order reserves grew and were clearly above normal levels. Excessive inventories were reported only occasionally. The confidence in the business expectations that had grown continuously over the previous four months decreased in June somewhat. With regard to future chances on foreign markets, optimism continues to be strong. The expansive production plans were revised upwards to some extent. Also personnel plans show more indications of additional hiring. According to the responses more scope for increasing prices is expected in the coming months. After some weakening in the previous month, the positive business situation judgments dominated in eastern German manufacturing again more strongly. With lively demand some delivery bottlenecks occurred despite stepped-up production activity. The outlook for the coming months was again assessed a little less confidently, also with respect to export business. Faced with low levels of finished goods, more and more production plans are aimed at expansion.