Manufacturing (Germany):
Cooling of the business climate

The survey participants in manufacturing are somewhat less satisfied with their present business situation. The firms continue to assess their present situation as good, but the share of negative responses has increased. Demand has developed more weakly, and excess inventories have grown. The survey participants are more dissatisfied with their order stocks than in July; order levels are still judged favourably in a long-term comparison, however. Especially the manufacturers of capital goods evaluated the order situation as more than satisfactory despite some setbacks in the past three months. The manufacturers, nevertheless, plan to cut back production slightly. Also with regard to hiring additional personnel, they plan to exercise more restraint, but a broad-based reduction of personnel is not indicated; the chemical industry, mechanical engineering and petroleum products still plan new hirings, for example. Thus, despite the less favourable judgement of current business, the situation in manufacturing is still good. With regard to the six-month outlook, however, the firms are increasingly sceptical: The share of companies that expect more unfavourable business has increased. The firms again expect noticeably weaker impulses from foreign business. Exports will not be able to support the German economy to the extent that it has thus far.