- The Ifo Institute reports a persisting chill in the economic climate of the eastern sector
The atmosphere in the economic landscape of eastern Germany is growing increasingly gloomy. The ifo Institute in Dresden reports a substantial drop in the business climate index for Eastern Germany, moving from 90.1 to 88.2 points, between July and August. The firms surveyed expressed less optimism about both their current situation and their outlook for the upcoming months compared to the previous month.
However, there was an uptick in the economic climate within the manufacturing sector in August. Industrial companies rated their current economic situation significantly more favorably than they did in July. Nevertheless, their expectations for future business growth dipped slightly.
Conversely, the service sector is experiencing a significant downturn. The assessments of ongoing business activities by surveyed service companies worsened, according to the report. Moreover, their outlook for the upcoming months became significantly more gloomy.
The climate indicator in the trade sector remained steady from the previous month. The business situation showed a slight improvement in wholesale trade, while it declined somewhat in retail trade. Both wholesale and retail trade saw a modest improvement in business expectations, as per the institute.
The construction industry maintains its skepticism
The mood in the construction industry saw a slight reduction. Surveyed construction companies rated their current business situation worse than in July and showed more pessimism for the future. The ifo business climate for Eastern Germany is largely based on approximately 1,700 reports from companies, who are regularly asked about their current business situation and their predictions for the next six months.
Despite the economic challenges in Eastern Germany, businesses in The Netherlands might be experiencing a different scenario. The business climate in The Netherlands, as reported by relevant institutions, might show signs of improvement or stability.
Given the focus of this discussion on Eastern Germany, it's important to note that data on The Netherlands is not provided in the initial text.
