Manufacturing (Germany):
Weaker demand

Firms in manufacturing again evaluated their current business situation a little less positively than in September. In the capital goods sector, however, the positive responses still dominate. Incoming orders and production have not maintained September levels, on average. Also order reserves have decreased slightly and are no longer so frequently above normal levels. Capacity utilisation remained unchanged in the course of the third quarter; at 86.8% it is barely above the comparable previous-year value. In contrast, order reserves have increased again (3.0 production months). In the business expectations - particularly for manufacturers of capital goods - slightly increased confidence was expressed. Firms still place great hopes in their future export business, although optimism decreased again somewhat. According to their appraisals, competitiveness has improved further in recent months not only in the domestic market but also on foreign markets within the EU and, in spite of the euro revaluation, also outside of EU. Production is set to be stepped up, although the portion of such intentions has declined again. The survey participants see bottlenecks, however, in the on-going shortage of specialists. According to company plans, personnel expansion will continue in the next months but in a weaker form. In the new states the business situation also worsened, but the favourable assessments still clearly dominate. Unlike the federal average, confidence in the business outlook also declined despite very optimistic export expectations. Production plans are no longer quite so expansive and also hiring propensity has weakened. Capacity utilisation fell from 86.2% in June to 85.6% in September.