Manufacturing: Business Outlook Turns Favourable

After last month's slight setback, the business climate indicator in manufacturing climbed to a new record high for the year. Demand continued to pick up and satisfaction with order reserves reached its highest level in over ten years on balance. The good order situation was reflected in very high capacity utilisation of 87.1% (versus 86.7% last month). Assessments of the current business situation improved accordingly in October, largely compensating for losses sustained last month. In view of exceptionally low inventories and more optimistic export expectations on the part of participants, expansive production plans were ramped up even further. Overall, many of the manufacturers surveyed expressed confidence in the business developments expected in the months ahead. The corresponding indicator reached its highest level since February 2011. Producers of capital goods in particular expressed growing optimism about the next six months. The clearest improvement in the business outlook was seen in mechanical engineering. While assessments of the current business situation in metal production and processing brightened considerably, they deteriorated visibly in the food and foodstuffs segment.