ifo Business Climate Eastern Germany: Expectations Improved (January 2022)
Sentiment among companies in eastern Germany improved slightly in January. The downward trend that has persisted since last summer appears to have halted for the time being. The ifo Business Climate Index for the entire regional economy rose to 97.0 points, up from 96.1 points in December. Participating companies reported a marked decline in their assessments of the current situation. At the same time, they raised their expectations substantially compared to the previous month. This development was driven by manufacturing and the service sector.
In eastern German manufacturing, the business climate brightened noticeably in January. The companies surveyed were somewhat less positive in their assessments of the current business situation than they had been in December. However, their expectations were much improved.
The ifo Business Climate Index climbed appreciably in the eastern German service sector in January. The service providers surveyed lowered their assessments of the current situation a little, while they revised their expectations for the coming six months substantially upward.
In eastern German trade, sentiment deteriorated slightly in January. The main reason for this was the perceptible decline in assessments of the current situation across both retail and wholesale. There was, however, a marginal improvement in business expectations.
In eastern German construction, the business climate was a good deal cooler in January. The construction businesses surveyed rated their current business considerably less positively than in the previous month, but they raised their expectations for the next few months somewhat.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
