Ifo Institute: Business climate in the East brightens slightly

According to the Ifo Institute in Dresden, the mood in the East German economy brightened slightly in August. The companies surveyed assessed their business situation as slightly worse than in the previous month, but raised their business expectations slightly compared to July, the institute reported.

However, there are differences between the individual business sectors that the institute surveys every month. In industry, the business climate has cooled slightly, it said. Companies assessed their current situation slightly more negatively than in the previous month. Future business expectations were also somewhat gloomier.

Pessimism in industry, more confidence among service providers

In contrast, the eastern German service sector was more optimistic. Both the current business situation and expectations for the coming months were viewed more positively. A differentiated picture emerged in the retail sector. The current situation was assessed as worse than in July, although expectations were raised slightly. The mood in the construction industry is similar.

The Ifo Business Climate for Eastern Germany is based on around 1,700 monthly reports from companies in various sectors. They are asked to assess their current business situation and share their expectations for the next six months. The Ifo Index is regarded as an accurate leading indicator for the economy.