Manufacturing (Germany):
Clearly fewer orders

In manufacturing firms reported a much more unfavourable business situation. The demand situation has worsened and the companies are clearly more dissatisfied with their order stocks. Although production has been scaled back, firms still assess current inventories as too large and plan to reduce production further. Hardly any plan to take on additional personnel, and current staff levels tend to be seen as too large. No further impulses are expected from exports; for the past five months export expectations have weakened continuously. A clear worsening of export business is feared by car makers. The less favourable assessments of the business situation permeated all three major sectors: the manufacturers of intermediate products, capital goods and consumer goods all assessed their business situation less favourably. The income situation in manufacturing as a whole was assessed as satisfactory, after having been classified as mostly good at the beginning of the year. Since then the profit situation has worsened somewhat, according to the survey responses. In particular the price increases for energy and commodities as well as the appreciation of the euro have put pressure on profits, although a sharp downward correction is not evident in the responses. With regard to the six-month business outlook, the critical voices have again gained importance. Still on a solid foundation, manufacturing is bracing for clearly reduced business in the coming months.