ifo Business Climate Eastern Germany: Upward Trend Unbroken (September 2020)
Sentiment among eastern German companies continued to improve in September. The ifo Business Climate Index for the entire regional economy in eastern Germany rose from 94.5 points to 95.8 points. Both the assessments of the current situation and the business expectations of the eastern German companies surveyed increased, even if they are not yet back up to pre-crisis levels.
In eastern German manufacturing, the business climate brightened substantially in September. This month it is back in positive territory for the first time since the beginning of the pandemic. Both subindices contributed to this development with significant gains.
In the eastern German service sector, the ifo Business Climate Index rose only marginally in September. Although the service providers assessed their current situations as worse than in August, their outlook rose slightly.
The mood in eastern German trade improved noticeably in September, with the subindices for wholesale and retail trade both heading upward.
In eastern German construction, the business climate continued to cool in September. This was mainly due to assessments of the current situation that were much less positive. The construction companies surveyed raised their expectations slightly.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
