ifo Business Climate Eastern Germany Falls Slightly (June 2022)
Sentiment among companies in eastern Germany saw a slight decrease in June. The ifo Business Climate Index for the entire regional economy fell to 94.1 points, down from 94.5 points in May. The survey participants’ assessments of their current situation improved marginally. At the same time, their outlook became slightly more negative. The gap between situation and expectations is widening, which is an expression of great uncertainty.
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In eastern Germany’s manufacturing sector, the ifo Business Climate Index declined somewhat in June. Assessments of the current business situation improved considerably, while business expectations for the coming six months decreased noticeably.
In the eastern German service sector, sentiment brightened a bit in June. Assessments of the current situation and expectations both improved marginally.
In eastern German trade, the barometer of business sentiment fell appreciably in June. This was largely due to wholesalers adjusting their assessments of the current business situation massively downward. The outlook for the coming six months worsened markedly as well.
In eastern German construction, the business climate turned a little brighter in June. The construction businesses surveyed raised both their assessments of the current situation and their business expectations somewhat.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
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Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
| 06/21 | 07/21 | 08/21 | 09/21 | 10/21 | 11/21 | 12/21 | 01/22 | 02/22 | 03/22 | 04/22 | 05/22 | 06/22 | |
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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.
