Wholesaling: Current Business Situation Deteriorates

In wholesaling the business climate indicator slipped from last month’s very high level. The downturn was primarily due to assessments of the current business situation. After excellent assessments in recent months, the balance figure deteriorated significantly, reaching its lowest level since January 2017. The overall situation in the branch nevertheless remains good, with over a third of the wholesalers surveyed reporting an improvement in the business situation; and just 10% reported a poorer situation. However, wholesalers expressed caution about the short-term future. Business expectations clouded over for the fifth month in succession. According to data from the German Federal Statistics Office, turnover grew strongly in January by 5.7% (real) compared to the same period last year. This was confirmed by the ifo survey. Survey participants, by contrast, were disappointed with developments in revenues at the end of last year. The index for wholesale prices rose by 1.2% in February and March, which was less dynamic than last year’s average rate (3.4%). The majority of survey participants expected sales prices to be higher and/or remain stable in April. Many wholesalers expect to implement price increases over the next three months. According to the German Federal Statistics Office, the number of persons in employment rose by 1.7% in January; and was thus higher than the annual average for 2017. Staff numbers are expected to remain stable over the next three months.