From the Ifo Business Survey for June 2013
Credit Constraint Indicator Drops to New Low
Credit constraints for German industry and trade hit a new historical low in June. Only 19.4% of the companies surveyed reported restrictive access to bank credit. The European Central Bank's interest rate cut of 8 May seems to have led to a further improvement in the credit situation. The environment for corporate financing with bank credit remains very good in Germany.
Credit constraints fell again clearly in manufacturing to just below 18%. Only 15.7% of large companies reported problems in obtaining credit. For medium and small-sized companies this figure also dropped to 17.0% and 21.5% respectively.
Credit constraints also edged down to 23.2% in construction, falling to a new historical low. In trade the number of firms that reported restrictive access to credit rose slightly to 19.5%.
Head of Department Business Cycle Analysis and Surveys
The credit constraint indicator is based on ca. 4,000 responses of firms in industry and trade from the sectors manufacturing, construction, wholesaling and retailing. The firms are asked to respond to the following question: “How would you assess the current willingness of banks to extend credit to businesses”? The answers to choose from are “accommodating”, “normal” and “restrictive”. The credit constraint is calculated from the percentages of the responses to the last of the three categories. For the compilation of the credit constraint indicator for German industry and trade, the percentage shares from manufacturing, construction and retailing and wholesaling are weighted with the average credit volume of these sectors in 2005.
Large firms are those that have more than 249 employees or a turnover of more than €50 million. Small firms are those that have less than 50 employees or a turnover of less than €10 million.