- Ifo-Institut: Business climate in eastern Germany declined
The mood in the eastern German economy continues to deteriorate. According to the Ifo Institute in Dresden, the business climate index fell from 92.3 to 90.2 points in July. The surveyed companies assessed both their current situation and their expectations for the coming months more negatively.
The institute reported that the business climate in the manufacturing sector, among others, cooled down. Companies assessed their current business situation more negatively than in the previous month, while their expectations remained unchanged.
Cooling in the service sector
The business climate index also fell in the service sector in July. Companies assessed their ongoing businesses significantly worse and were also more pessimistic about the coming months.
There was also a cooling of the business climate in retail. Companies in both the retail and wholesale sectors reported worse business compared to June. The outlook for both sectors also deteriorated, especially in wholesale.
Negative trend in construction
The mood also deteriorated in the construction sector. The surveyed construction companies assessed their business situation worse than in June and were also less optimistic about the future.
The Ifo business climate East Germany is based on around 1,700 monthly reports from companies in the manufacturing sector, the service sector, retail, and the construction sector. They are asked to evaluate their current business situation and provide their expectations for the next six months.
The Ifo Institute indicated that the business climate in East Germany's construction sector also showed a decline, with companies assessing their current situation and future expectations less favorably. The negative trend in business climate is not limited to the manufacturing sector, as retail and wholesale companies also reported worse business conditions and less optimistic outlooks in July.
