ifo Institute: German Automotive Industry Slowly Starts Up Again
The German automotive industry hopes to see a slow recovery in the coming months. This is the finding of the ifo Institute’s latest Business Survey. Business expectations have taken a clear positive turn for the first time in seven months. The expectations indicator rose from minus 11.9 points in May to plus 27.7 points in June.
However, the industry’s assessment of the current business situation is still very pessimistic. From minus 85.6 points in May, the index rose slightly to minus 81.8 points in June. In April 2009, the index stood at minus 82.9 points.
For employees in the industry, the situation continued to worsen, with the personnel planning index falling from minus 50.5 points in May to minus 54.4 points in June. During the financial crisis in April 2009, it stood at minus 50 points.
By contrast, there was a sharp rise in demand to plus 52.2 points in June from its level of minus 80.6 points in May. This marks the greatest month-over-month improvement recorded since 1991. The industry also took a positive view of the order backlog for the first time in 13 months. In June, the indicator surged to plus 15.2 points from minus 65.7 points in May. Production expectations also increased for the second month in a row. The indicator jumped to plus 50.0 points in June from plus 23.5 points in May. More companies want to build up their production again from its current low levels.
Exports seem to be recovering only cautiously: at plus 16.8 points in June, the indicator for export expectations was positive for the first time in 17 months, up from minus 8.7 points in May.
Companies still feel that their stock of finished goods is too high. The indicator remained stable at plus 41.6 points in June after measuring 42.1 points in May.
