In manufacturing (including food and beverages) the business climate index has risen noticeably. For the eighth time in succession, the firms assessed their business situation as less unfavourable. Their business expectations have also brightened. Also, the survey participants are no longer quite so dissatisfied with their order stocks. For their export business they anticipate a clear revival. At 75.2% equipment was utilised to a greater extent than in October 2009 (73.0%) but below the rate of January 2009 (76.2%). With clearly declining inventory pressure, firms have revised their production plans upwards. Pressure on prices has abated. In comparison to the situation in autumn, the exporting firms have given better assessments of their competitive situation both within as well as outside the EU.
In construction the business climate index has risen strongly. Although the surveyed contractors have given slightly more unfavourable assessments of their current business situation than in December, they are clearly less sceptical regarding business in the near future. Currently, however, many firms are complaining about the weather-related constraints on construction activity. With their present order stocks, they are clearly less dissatisfied than in December and no longer anticipate a quite so negative development of building activity in the coming months. Equipment utilisation fell from 68% to 64% (seasonally and weather adjusted), the previous year value was thus missed by 3 percentage points. Three out of four firms reported business constraints; a year ago it was only 65%. As one year ago, one in three complained of a lack of orders; weather-related constraints were more frequent: 56% vis-à-vis 47% in January 2009. Order stocks stagnated at 2.3 months (seasonally and weather adjusted); order reserves were also not larger than one year ago (2.4 months). Order assessments accordingly remained virtually unchanged, with ca. 40% expressing dissatisfaction. Firms also reported pressure on prices in January, but expect prices to stabilise in the coming months. Personnel stocks could be increased slightly in the coming months.
The business climate in wholesaling has brightened further. The survey participants are once again more satisfied with their business situation. They are also less critical regarding business development in the coming half year. Order plans are geared upwards to some extent but are still not at levels of 12 months ago. Employment plans are slightly contractive. Prices have increased and firms plan more frequent price hikes in the coming months.
In retailing a nearly unchanged business situation has been reported, with retailers somewhat more reserved regarding the six-month outlook than in December. As a result, the business climate in retailing remains largely unchanged. Despite a slight increase in inventories there are still fewer reports of reduced order activity. Fewer firms as in December were forced to reduce prices. The share of firms that plan to make price concessions has further increased.
The business climate indicator for the service sector (without distribution, banking, leasing, insurance or government) worsened only slightly in January. The indicator had, however, reached a high for the year in December. In January the surveyed service providers assessed their current business situation somewhat more unfavourably. However, they are more confident than before regarding business development in the coming half year. Turnover matched in levels of January 2009. Personnel plans are again less restrictive.
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