ifo Institute: Business Situation in the German Automotive Industry Brightens
Sentiment among German automotive manufacturers and suppliers improved in August. This is a finding from the ifo Institute’s latest Business Survey. The industry’s assessment rose from minus 68.3 points in July to minus 34.8 points in August. “A light has gone on in the dark cellar,” is how Klaus Wohlrabe, Head of Surveys at ifo, describes the development. Business expectations fell slightly, down to 37.4 points from 40.9 points in July.
Export expectations saw a similar dip, falling to 31.3 points after 39.9 points in July. Production plans went down to 48.4 points after 49.4 points in July. “The employment situation remains strained, and companies are still planning to move forward with layoffs,” Wohlrabe continues. The corresponding expectations increased slightly up to minus 48.3 points from minus 51.7 points in July.
Order books improved compared to the previous month, with the indicator rising to 37.9 points from 25.9 points in July. Compared to the previous month, demand worsened somewhat, though it still remained at a high level: the demand indicator slid to 62.3 points from 69.5 points in July. “Catch-up effects and the reduction in VAT are definitely playing a role here,” Wohlrabe adds. Demand was met primarily from inventories, which were able to be significantly reduced.
