ifo Business Climate Eastern Germany Jumps Upward (February 2022)
Sentiment among companies in eastern Germany continued improve in February. The ifo Business Climate Index for the entire regional economy jumped to 100.5 points, up from 97.1 points in January. Survey participants reported a strong improvement in their assessments of the situation. At the same time, they raised their expectations considerably compared to the previous month. This positive development was driven primarily by trade and the service sector, which seem to see light at the end of the tunnel. However, the survey was completed before the Ukraine crisis came to a head.
In eastern German manufacturing, the business climate brightened somewhat in February. The manufacturing companies surveyed assessed their current business as a little better than in the previous month, At the same time, their expectations improved slightly.
The ifo Business Climate Index climbed appreciably in the eastern German service sector in February. The service providers surveyed raised their overall assessments of the current situation sharply, while they revised their expectations for the coming six months substantially upward.
Sentiment in eastern Germany’s trade was much improved in February. The main reason for this was a huge improvement in business expectations across both retail and wholesale. However, retailers lowered their assessments of the current business situation slightly.
In eastern German construction, the business climate was somewhat cooler in February. The construction companies surveyed assessed their current business as much better than in the previous month. At the same time, their outlook for the coming months was drastically more negative.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
