Retailing (Germany):
Further brightening of business climate

Retailing reported a somewhat more favourable business situation and appraised the six-month business outlook less sceptically. The business climate has brightened. The improvement is particularly due to car retailing. Without this sector, the business climate index in retailing has fallen. Retailers other than car dealers increasingly assessed their inventories as too high and plan to reduce their orders of new products. More of them intend to make concessions on prices. In car retailing a sudden improvement has occurred. Complaints about a poor business situation have decreased considerably. Furthermore, the survey participants clearly regard future business less pessimistically. They assess their inventories as adequate; in the previous month they were mostly seen as too large. In addition, they plan for the most part to give up their reserve with regard to new orders. The grant offered by the government for scrapping an older car seems to be having an effect. With the exception of the special development in car retailing, the business climate in all portions of the consumer chain has worsened: for consumer goods manufacturers, consumer goods wholesalers and retailers, excluding car dealerships. This indicates that domestic private consumption is currently not in a position to offset the decline in foreign demand.