Manufacturing: scepticism continues to weaken

There was virtually no change in the poor business and order situation in manufacturing (including food and beverages) in June. However, since the firms were clearly less affected by falling demand and since they were also able to reduce inventories somewhat, they were again less sceptical concerning their future business development. As a result the business climate improved. Although production was cut back, according to the survey results, cuts were not as strong as they had been in the previous months. Also in the coming quarter firms' plans indicate that the declines in manufacturing output should slow. The use of shorter working hours has expanded again: 47% of the firms resorted to this instrument in June (March: 37%). They also indicated their intention to reduce staff levels albeit not as frequently as in May. The decline in export business will weaken somewhat, according to the firms' responses. Price reductions are planned less frequently.