ifo Business Climate Index Eastern Germany Falls Further (November 2021)
Sentiment among companies in eastern Germany deteriorated noticeably in November. The ifo Business Climate Index for the entire regional economy continued to slide, falling to 97.4 points, down from 98.7 points in October. Participating companies reported a marked decline in their assessments of the current situation. At the same time, their expectations dropped somewhat compared to the previous month.
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In eastern German manufacturing, the business climate cooled significantly again in November. The negative trend of recent months continues unabated. Industrial companies rated their current business a little less positively and lowered their expectations drastically for the coming months. Pessimism is spreading in manufacturing.
In the eastern German service sector, sentiment plunged in November. The service providers surveyed lowered their overall assessments of the current situation considerably, while they scaled back their expectations for the coming six months somewhat. Pessimism is spreading in this sector as well.
The ifo Business Climate Index in eastern German trade plummeted in November. While the subindices for retail showed opposing trends, with positive assessments of the current situation and a negative outlook, in wholesale all indices pointed downward.
In eastern German construction, the business climate turned a little brighter in November. The construction companies surveyed assessed their current business as much better than in the previous month, while their outlook for the coming months trended sideways.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
| 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | 05/21 | 06/21 | 07/21 | 08/21 | 09/21 | 10/21 | 11/21 | |
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Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
| 11/20 | 12/20 | 01/21 | 02/21 | 03/21 | 04/21 | 05/21 | 06/21 | 07/21 | 08/21 | 09/21 | 10/21 | 11/21 | |
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| Construction |
Source: ifo Business Survey.
© ifo Institute
The ifo Business Climate Eastern Germany is based on approx. 1,700 monthly survey responses from firms in manufacturing, construction, wholesale, and retail. The firms are asked to give their assessments of the current business situation and their expectations for the next six months. They can characterize their situation as “good,” “satisfactory,” or “poor” and their business expectations for the next six months as “more favorable,” “unchanged,” or “more unfavorable.” The balance value of the current business situation is the difference of the percentages of the responses “good” and “poor”; the balance value of the expectations is the difference of the percentages of the responses “more favorable” and “more unfavorable.” The business climate is a transformed mean of the balances of the business situation and the expectations. For the purpose of calculating the index values, the transformed balances are all normalized to the average of the year 2015.
