ifo Business Climate Eastern Germany Rises a Second Time in a Row (April 2024)
The ifo Business Climate Index Eastern Germany rose considerably in April. The barometer of business sentiment for the regional economy in eastern Germany climbed to 92.3 points, up from 90.2 points in March. The eastern German companies surveyed provided assessments of their business situation that were somewhat better than the previous month, and they raised their business expectations substantially. The Business Climate Index has now risen for the second time in succession. Signs indicate an upward trend.
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In eastern German manufacturing, the business climate cooled significantly in April. The companies surveyed again assessed their current business situation as drastically worse than in the previous month. Their expectations for future business development fell considerably.
The ifo Business Climate Index rose noticeably in the eastern German service sector in April. Compared to the previous month, the service providers surveyed raised their assessments of the current situation slightly and their business expectations for the coming months substantially.
The business climate in eastern German trade brightened a little. Both retailers and wholesalers in eastern Germany reported better business than in the previous month. The outlook shows a contrasting trend: while wholesale companies raised their outlook noticeably, retail companies significantly lowered their outlook.
In eastern German construction, the business climate turned appreciably brighter in April. The construction companies surveyed stated that their business situation was now a little better than in March. They also raised their expectations for future business greatly.
Joachim Ragnitz and Marcel Thum
Executive Directors, Dresden Branch of the ifo Institute
ifo Business Climate Eastern Germany
(Index, 2015 = 100, seasonally adjusted)
04/23 | 05/23 | 06/23 | 07/23 | 08/23 | 09/23 | 10/23 | 11/23 | 12/23 | 01/24 | 02/24 | 03/24 | 04/24 | |
Climate | |||||||||||||
Situation | |||||||||||||
Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Eastern Germany by Sector
(Balances, seasonally adjusted)
04/23 | 05/23 | 06/23 | 07/23 | 08/23 | 09/23 | 10/23 | 11/23 | 12/23 | 01/24 | 02/24 | 03/24 | 04/24 | |
Eastern Germany | |||||||||||||
Manufacturing | |||||||||||||
Service sector | |||||||||||||
Trade | |||||||||||||
Construction |
Source: ifo Business Survey.
© ifo Institute
The ifo Business Climate Eastern Germany is based on approx. 1,700 monthly survey responses from firms in manufacturing, construction, wholesale, and retail. The firms are asked to give their assessments of the current business situation and their expectations for the next six months. They can characterize their situation as “good,” “satisfactory,” or “poor” and their business expectations for the next six months as “more favorable,” “unchanged,” or “more unfavorable.” The balance value of the current business situation is the difference of the percentages of the responses “good” and “poor”; the balance value of the expectations is the difference of the percentages of the responses “more favorable” and “more unfavorable.” The business climate is a transformed mean of the balances of the business situation and the expectations. For the purpose of calculating the index values, the transformed balances are all normalized to the average of the year 2015.