ifo Business Climate Saxony: Climate Cools Slightly (January 2024)

The business climate in Saxony cooled off slightly in January. The ifo Business Climate Index for the region’s economy fell to 91.0 points, down from 91.3 points in December. The Saxony-based companies surveyed assessed their business situation as slightly better than in December; they reduced their expectations for the coming months slightly.

In Saxony’s manufacturing, the ifo Business Climate Index rose sharply in January. The manufacturing businesses surveyed assessed their current situation as much better than in the previous month. Their business expectations rose significantly as well.

In Saxony’s service sector, the business climate cooled noticeably in January. The service providers surveyed assessed their current business situation as somewhat worse than in the previous month; they were also considerably more pessimistic about the future.

The ifo Business Climate Index in Saxony’s trade also fell noticeably in January, continuing its downward trend. This was mainly due to a significant decline in assessments of the current situation in both wholesale and retail. Looking to the months ahead, the trading businesses surveyed were only slightly more pessimistic than in the previous month.

The business climate for construction in Saxony worsened a little in January. Compared to the previous month, the businesses surveyed gave substantially gloomier assessments of their current business. Business expectations remained unchanged.

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

Chart: Business Situation and Expectations Saxony by Sector, ifo Business Survey, January 2024

ifo Business Climate Saxony

(Index, 2015 = 100, seasonally adjusted)

	01/23	02/23	03/23	04/23	05/23	06/23	07/23	08/23	09/23	10/23	11/23	12/23	01/24
Climate	93.6	95.6	96.7	98.9	99.1	94.4	92.5	90.8	88.4	91.2	92.8	91.3	91.0
Situation	99.4	102.0	101.5	102.0	102.6	100.1	97.1	95.1	92.3	92.9	95.1	93.3	93.5
Expectations	88.1	89.5	92.2	95.9	95.8	89.0	88.0	86.8	84.6	89.5	90.5	89.3	88.5

Source: ifo Business Survey.
© ifo Institute

ifo Business Climate Saxony by Sector

(Balances, seasonally adjusted)

	01/23	02/23	03/23	04/23	05/23	06/23	07/23	08/23	09/23	10/23	11/23	12/23	01/24
Saxony	2.4	6.7	9.2	13.9	14.4	4.2	0.0	-3.5	-8.8	-2.8	0.7	-2.6	-3.2
Manufacturing	0.8	-0.3	2.8	8.7	13.1	-5.0	-5.0	-12.4	-12.3	-6.0	-6.4	-11.0	-3.7
Service sector	15.0	20.3	24.7	27.0	29.0	18.0	11.3	6.9	3.5	11.9	16.1	14.0	8.7
Trade	-26.4	-18.5	-25.1	-19.3	-16.9	-23.0	-30.3	-21.5	-26.8	-25.9	-15.9	-25.0	-35.1
Construction	-18.5	-21.2	-13.4	-12.7	-15.4	-19.0	-18.0	-25.7	-34.5	-36.4	-27.8	-29.0	-32.1

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.