Hope for Infrastructure Package Brightens Sentiment in Germany’s Wholesale Sector

The business climate for the wholesale of raw materials, intermediate products, machinery and equipment in Germany improved slightly in June. The figure rose from -20.5 points in May and is now at -16.7 points. “One reason for this could be construction-related trade,” says ifo industry expert Ulrike Mandalka. “This is where the German government’s special fund for infrastructure raises hope for fresh impetus. Industrial customers are also counting on increased demand thanks to the planned accelerated depreciation, tax cuts, and lower grid fees.”

The business situation and expectations of wholesalers in production-related B2B improved slightly from -17.7 points to -15.1 points and from -23.3 points to -18.3 points respectively. Overall, however, companies remain skeptical, This is also reflected in the planned job cuts, which are continuing, albeit at a slightly slower pace than in May. 

Production-related B2B is the link between manufacturers and customers in the manufacturing industry, skilled trades and the construction industry. That makes it an early indicator of economic development.

The picture is similar for trade in consumer goods, where the business climate has also brightened from -13.5 points to -11.1 points. The assessment of the situation and expectations likewise rose to -12.8 points (-13.7 points in May) and -9.5 points (-13.4 points in May) respectively. “Private households are spending slightly more on their consumption. That gives companies hope again,” says Mandalka. However, this is not reflected in personnel planning. Retailers even expect staff reductions to increase further.