ifo Business Climate Saxony Sees a Clear Rise (April 2023)

The ifo Business Climate Index Saxony rose appreciably in April. The barometer of business sentiment in Saxony’s economy climbed from 96.8 points in March to 99.4 points in April. The Saxony-based companies surveyed reported a slight improvement in the business situation from the previous month and also raised their business expectations considerably.

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In Saxony’s manufacturing, the ifo Business Climate Index rose sharply in April. The companies surveyed rated their current business situation as significantly better than in the previous month and also raised their expectations for the coming months considerably.

The business climate in Saxony’s service sector improved slightly in April. Saxony’s service providers raised both their assessments of the current situation and their business expectations somewhat compared to the previous month.

In Saxony’s trade, the business climate turned noticeably brighter in April. While retailers’ assessments of their situation were marginally worse than in March, wholesalers’ assessments improved slightly. Both groups expected a significant improvement in business in the coming months.

The business climate in Saxony’s construction improved a bit in April. Companies’ slightly poorer assessments of their current business situation contrasted with assessments of future business developments that were somewhat less pessimistic compared with the previous month.

Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute

ifo Business Climate in Saxony, April 2023

ifo Business Climate Saxony

(Index, 2015 = 100, seasonally adjusted)

	04/22	05/22	06/22	07/22	08/22	09/22	10/22	11/22	12/22	01/23	02/23	03/23	04/23
Climate	96.2	95.4	94.8	93.5	91.8	87.7	89.2	91.8	93.5	93.4	95.5	96.8	99.0
Situation	101.3	103.9	103.7	103.1	100.5	97.4	96.7	98.9	100.2	99.2	101.7	101.2	101.6
Expectations	91.5	87.6	86.7	84.7	83.9	79.0	82.2	85.2	87.3	88.1	89.6	92.7	96.5

Source: ifo Business Survey.
© ifo Institute

ifo Business Climate Saxony by Sector

(Balances, seasonally adjusted)

	04/22	05/22	06/22	07/22	08/22	09/22	10/22	11/22	12/22	01/23	02/23	03/23	04/23
Eastern Germany	8.2	6.3	5.1	2.2	-1.4	-10.3	-7.1	-1.4	2.3	2.1	6.5	9.5	14.1
Manufacturing	2.6	2.4	2.2	-2.8	-8.5	-10.3	-15.5	-11.4	0.4	1.5	-0.3	3.2	11.1
Service sector	23.3	17.8	18.5	12.6	5.0	-3.7	4.2	13.0	14.3	13.3	20.3	25.5	28.8
Trade	-6.9	0.5	-24.7	-22.4	-23.3	-37.9	-26.8	-24.3	-21.5	-26.8	-18.2	-25.0	-19.1
Construction	-31.1	-12.8	-8.3	-16.4	-18.0	-21.7	-30.8	-20.3	-19.7	-19.3	-21.6	-13.6	-12.5

Source: ifo Business Survey.
© ifo Institute

The ifo Business Climate for Saxony is based on approx. 500 monthly survey responses from businesses in manufacturing, the service sector, trade, and construction. Companies are asked to give their assessments of the current business situation and their expectations for the next six months. They can describe their situation as “good,” “satisfactory,” or “poor” and their business expectations for the next six months as “more favorable,” “unchanged,” or “less favorable.” The balance value of the current business situation is the difference in the percentage shares of the responses “good” and “poor”; the balance value of the expectations is the difference in the percentage shares of the responses “more favorable” and “less favorable.” The business climate is a transformed mean of the balances of the business situation and the expectations. To calculate the index values, the transformed balances are all normalized to the average for the year 2015.