ifo Media Center
The ifo Institute invites you to participate in the discussion of interesting economic topics via the Internet. In our ifo Media Center a whole series of remarkable events are available and can be viewed in full length. We also record selected speeches and presentations given by employees or at events and make them available in our Media Center.
Increase in Short-Time Work Halted in German Manufacturing
German manufacturing companies responded to the economic slowdown in winter with significantly more short-time work. Although it is likely to remain high in the coming months, it is not expected to worsen any further. In the second quarter, 18.8% of manufacturing companies responded that they were planning to introduce short-time work in the next three months.
Football World Cups and European Championships Barely Improved Sentiment in the German Economy
Sentiment in the German economy has barely improved during World Cups and European Championships. “At the time of the 2006 World Cup in Germany, there was initially a sense of anticipation in the ifo economic surveys. In the 6 months before the World Cup, the probability of ‘better business’ in the coming months rose by 1.1%,” says Klaus Wohlrabe, Head of Surveys at ifo. “After the World Cup, German companies actually found their business situation slightly better, with the probability of ‘good’ increasing by 1.1%. During and after the World Cup, however, there were no more effects on expectations,” he adds. “We suspect something similar now for the European Championship.”
ifoCAST
ifoCAST generates forecasts of current German GDP with the help of a statistical model that works with historical correlations. These forecasts do not necessarily have to correspond to the published ifo Economic Forecasts, which also take expert knowledge into account.
German Chemical Industry Confident Again for the First Time
The business climate in the chemical industry in Germany recovered in May and returned to positive territory again for the first time since March 2022. Its index rose to +5.8 points from -5.2* points in April. “Confidence is returning to the German chemical industry,” says industry expert Anna Wolf from the ifo Institute.
Business Climate of the Self-Employed in Germany has improved
The business climate for the solo self-employed and microenterprises in Germany improved in May. The “Jimdo-ifo Business Climate Index for the Self-Employed” rose to -11.8 points*, up from -13.8 points* in April. Business fared better, with only a few self-employed expressing dissatisfaction with their current situation. Expectations also brightened up somewhat, although they were still marked by skepticism. “The self-employed are increasingly hoping that the worst of the economic downturn is behind them,” says ifo expert Katrin Demmelhuber.
ifo Business Climate Index Saxony Drops Somewhat (May 2024)
The ifo Business Climate in Saxony cooled slightly in May. The barometer of business sentiment in Saxony’s economy fell from 95.6 points to 95.0 points. Although the companies surveyed assessed their business situation as significantly worse than in the previous month, they once again raised their business expectations slightly.
Sentiment in the German Automotive Cooling Down
The business climate in Germany’s automotive industry deteriorated in May. This indicator dropped to -8.6 points, down from -2.4 points* in April. “Backlash from China to the trade conflict over electric cars with the US and Europe could severely impact business for German automotive manufacturers,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.
Business Climate in German Retail Improves Slightly
The ifo Business Climate in Germany’s retail improved a little in May, finds the latest ifo Institute survey. The index rose to -13.3 points, up from -14.5 points in April. While this reflects slightly better business expectations, the outlook for retailers remains pessimistic. The indicator for assessments of the current business situation remained unchanged at -2.1 points. “The European Football Championship is unlikely to deliver any noticeable sales impetus for retail as a whole,” says ifo expert Patrick Höppner.
ifo Price Expectations Rise Slightly
The ifo price expectations rose a little to 16.2 points in May, up from 15.2 points* in April. In manufacturing and wholesale in particular, slightly more companies plan to raise their prices than in the previous month. In consumer-related industries, by contrast, price expectations declined. “This means inflation is likely to fall again in the coming months. In August, it should drop below 2 percent for the first time since March 2021,” says Timo Wollmershäuser, Head of Forecasts at ifo.
ifo Business Climate Eastern Germany Rises Further (May 2024)
The ifo Business Climate Index for Eastern Germany rose slightly in May. The barometer of business sentiment for the regional economy in eastern Germany climbed to 92.8 points, up from 92.2 points in April. The eastern German companies surveyed provided assessments of their business situation that were somewhat better than the previous month, and they raised their business expectations slightly. The upward trend continues.
ifo Employment Barometer Rises (May 2024)
The willingness among companies in Germany to hire new staff has increased slightly. The ifo Employment Barometer rose to 96.3 points in May, up from 96.0 points in April. “Demand for workers remains rather weak,” says Klaus Wohlrabe, Head of Surveys at ifo. “Those companies that are experiencing a lack of orders are also thinking about cutting jobs.”
German Export Expectations Rise (May 2024)
Sentiment in the German export industry has turned brighter. The ifo Export Expectations rose from minus 1.5 in April to plus 0.3 points in May. “Positive and negative responses are in nearly perfect balance,” says Klaus Wohlrabe, Head of Surveys at ifo. “The export economy is not yet developing any great momentum overall.”
ifo Business Climate Index remains unchanged (May 2024)
Sentiment among companies in Germany remains unchanged. The ifo Business Climate Index in May stayed at 89.3 points. Companies were less satisfied with their current business situation, but expectations brightened. The manufacturing, trade, and construction sectors are recovering, although the service sector took a slight hit. Germany’s economy is working its way out of the crisis step by step.
German Manufacturing Sees Threat to Its Competitiveness
The competitiveness of German manufacturing within the EU and on global markets has been deteriorating for two years. This is based on analyses of the monthly ifo survey. Companies have reported falling behind in terms of competitiveness within the EU since the third quarter of 2022. The situation is similar on the global markets (outside the EU), where this trend had begun in the first quarter of 2022. “It’s becoming more difficult for German manufacturers to compete,” says Klaus Wohlrabe, Head of Surveys at ifo.
Business Climate of the Self-Employed in Germany improved somewhat
The business climate for solo self-employed and microenterprises in Germany improved somewhat in April. The “Jimdo-ifo Business Climate Index for the Self-Employed” rose to -13.8 points*, up from -15.6 points* in March. Dissatisfaction with current business has decreased slightly, as has skepticism regarding expectations for the next six months. The signal coming from service providers is particularly positive. Here, order backlogs are slowly stabilizing. “The self-employed are hoping that the order situation will ease,” ifo Expert Katrin Demmelhuber says.
Business Climate in Germany’s Chemical Industry Improved
The business climate in Germany’s chemical industry improved in April. The index rose to -6.0 points, up from -10.1 points* in March. Companies assessed their current business situation at -16.0 points, which is slightly better than in March (-18 points*). Business expectations have brightened considerably – the indicator rose to +4.6 points in April, up from -1.9 points* in March. “The chemical industry is somewhat more confident about the coming months,” says industry expert Anna Wolf from the ifo Institute.
Half of Germany’s Residential Construction Companies Are Short on Orders
Residential construction in Germany is experiencing an order shortage. More than half the companies (55.2%) in this industry reported a lack of orders in April. In March, the figure was 56.2%. “Housebuilders are looking for signs of hope,” says Klaus Wohlrabe, Head of Surveys at ifo, “but there’s no end to the crisis in sight.”
Lack of Orders Slows Down the German Economy
The order shortage in Germany has worsened and is an obstacle to the economy. In April, 39.5% of manufacturing companies reported a lack of orders, up from 36.9% in January. In the service sector, the proportion rose from 32.1% to 32.4%. “The lack of orders is hampering economic development in Germany,” says Klaus Wohlrabe, Head of Surveys at ifo. “Almost all industries are affected.”
ifo Expert Survey: Negative Effects in Northern and Eastern Europe Due to War in Ukraine
Economic experts in Northern and Eastern Europe are seeing the negative impact of the war in Ukraine on the political and economic situation in their countries particularly clearly. This is a finding of the Economic Experts Survey (EES) conducted by the ifo Institute and the Swiss Economic Policy Institute (IWP). “Since the outbreak of the war, respondents who mention the keywords ‘Russia,’ ‘Ukraine,’ ‘NATO’ or ‘War’ in their answers have a much more negative view of their country’s political and economic situation than the others,” says ifo researcher Tuuli Tähtinen.
Prospects for Germany as a Business Location – Reform Proposals from Economists
The German economy is stumbling. For 2024, the European Commission (2023), IMF (2024), and OECD (2024) each forecast that Germany will be one of the laggards in terms of economic growth compared to other developed economies. The results of the Economic Experts Survey (EES) from fall 2023 show that Germany has become substantially less attractive as a business location over the past ten years. Politicians are alarmed. On April 22, 2024, the executive committee of the FDP adopted a position paper on accelerating the economic turnaround. In the 46th ifo and FAZ Economists Panel, we take this situation as an opportunity to ask German economics professors in which areas Germany is weak and which reforms are necessary. The survey, in which 180 people took part, was conducted from April 16 to April 23, 2024.