Wholesaling: Business Expectations More Optimistic

In wholesaling the business climate continued to improve in May. This was due to far more optimistic business expectations. Assessments of the business situation, by contrast, failed to remain at the record level seen last month. As the official statistics on revenues show, wholesalers started this year with higher revenues after last year's downward trend. In February developments in revenues were less dynamic. According to the latest results of the ifo Business Survey, development in revenues in May was far less favourable than last month, when they hit a record high. On balance, the figure was around the level of the long-term average. According to data from the German Federal Statistics Office and the ifo Business Survey, wholesaling sales prices have risen sharply since the beginning of the year. According to the German Federation of Wholesale and Foreign Trade (BGA), price increases in energy commodities was the main driver. However, the effect reflected in wholesaling prices should weaken gradually according to the BGA, leading to a moderate price increase over the course of this year. In May the number of wholesalers surveyed by ifo reporting sales price increases fell. In the months ahead a rising number of survey participants on balance expect price increases. While stock inventories increased, the number of wholesalers intending to increase their short-term orders declined somewhat in May. According to official statistics, the number of persons employed in wholesaling increased slightly in the first two months of 2017. Willingness to recruit new staff fell for the third consecutive month. Although wholesalers on balance still plan to expand their workforce, the vast majority of survey participants expect no change to their staff numbers.