East German Economy Shows Improved Business Sentiment

The business climate in East Germany is exhibiting a more positive outlook, particularly in the industrial and construction sectors. According to recent data from the Ifo Institute in Dresden, the overall business climate improved in July compared to the previous month.

While current assessments of the business situation by surveyed companies were slightly less favorable, expectations for future business prospects have increased. In the industrial sector, there was a notable enhancement in the business climate, with companies reporting significantly better evaluations of their current business situations, as well as an uptick in their future expectations.

Similarly, the construction industry also experienced a more optimistic business atmosphere, with expectations for the future having risen considerably. However, companies in both sectors reported a slight decline in their assessments of current business conditions compared to June.

In contrast, the retail sector experienced a marked downturn. Businesses reported significantly worse performance in July and a more negative outlook for the near future. The wholesale sector, on the other hand, saw a slight improvement in both current conditions and future expectations.

The service sector also recorded a dip in sentiment, with current business evaluations being somewhat less favorable. Nevertheless, there was a slightly more optimistic outlook for the upcoming months.

The Ifo Business Climate Index for East Germany is based on approximately 1,700 monthly responses from companies across manufacturing, services, trade, and construction. Businesses are asked to assess their current situation and their expectations for the next six months.