ifo Business Climate Saxony: Sentiment Remains Subdued (February 2024)

The business climate in Saxony deteriorated slightly in February. The barometer of business sentiment in Saxony’s economy fell from 91.0 points in January to 90.2 points in February, marking the third month in a row to see a decrease. The companies surveyed assessed their business situation as marginally worse than in January; they reduced their expectations for the coming months slightly.

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In Saxony’s manufacturing, the ifo Business Climate Index fell sharply in February. The manufacturing businesses surveyed assessed their current situation as considerably worse than in the previous month. Their business expectations declined significantly as well.

In Saxony’s service sector, the business climate brightened a little. Although the service providers surveyed assessed their current business situation as slightly worse than in the previous month, they were also somewhat less pessimistic in their expectations.

In Saxony’s trade, the business climate brightened considerably in February. Retailers’ assessments of the situation rose slightly, while wholesalers’ assessments increased sharply. Looking to the months ahead, however, the trading businesses surveyed were only somewhat less pessimistic than in the previous month.

In Saxony’s construction industry, the ifo Business Climate Index rose marginally in February. The construction companies surveyed assessed their current business situation as considerably less negative than in January. However, they were slightly more pessimistic about future business development.

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

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

ifo Business Climate Saxony

(Index, 2015 = 100, seasonally adjusted)

	02/23	03/23	04/23	05/23	06/23	07/23	08/23	09/23	10/23	11/23	12/23	01/24	02/24
Climate	95.5	96.7	98.9	99.1	94.4	92.5	91.0	88.4	91.2	92.8	91.3	91.0	90.2
Situation	101.9	101.5	102.0	102.6	100.1	97.1	95.1	92.3	92.9	95.1	93.3	93.5	92.5
Expectations	89.4	92.2	95.9	95.8	89.0	88.1	87.1	84.6	89.4	90.4	89.2	88.5	88.0

Source: ifo Business Survey.
© ifo Institute

ifo Business Climate Saxony by Sector

(Balances, seasonally adjusted)

	02/23	03/23	04/23	05/23	06/23	07/23	08/23	09/23	10/23	11/23	12/23	01/24	02/24
Saxony	6.5	9.2	13.9	14.4	4.2	0.2	-3.2	-8.8	-2.8	0.6	-2.6	-3.3	-4.9
Manufacturing	0.5	2.4	8.5	13.1	-4.7	-4.3	-12.1	-11.9	-5.8	-6.6	-12.0	-4.7	-13.5
Service sector	20.4	24.5	26.8	28.9	17.7	11.5	7.3	3.8	12.1	16.1	13.8	8.2	8.2
Trade	-18.3	-25.1	-19.3	-17.0	-23.2	-30.3	-21.6	-26.8	-25.9	-15.9	-24.7	-35.1	-24.8
Construction	-20.0	-13.5	-12.8	-15.5	-19.3	-18.1	-25.7	-34.6	-36.4	-27.9	-29.5	-32.6	-28.7

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.