Credit climate slightly deteriorated

According to the latest survey of the Ifo Institute, the credit climate continued to worsen in all sectors, although in the construction and trade sectors it did so only slightly. The lending situation for the firms of the manufacturing industry worsened further. This development was caused primarily by the responses of the east German firms, whose credit climate fell for the first time since the start of the survey. Retailers and wholesalers also assessed banks’ lending policy more negatively. In regional terms, the development has thus become aligned. Last March it had been primarily west German retailers and wholesalers reporting more restrictive policies of their banks; now this trend may also be observed for their east German counterparts. Firms in the construction industry see the banks’ lending decisions differently depending on the region they are in. In western Germany, the credit climate has continued to cool off slightly, whereas in eastern Germany the construction firms even reported a small improvement.