Ifo Institute: Sentiment in eastern German economy improves

The mood in the eastern German economy brightened in November. "The eastern German companies surveyed assessed both their business situation and their business expectations as slightly better than in the previous month," announced the Dresden-based Ifo Institute. The sentiment barometer for the regional economy in eastern Germany moved from 89.3 points in October to 90.0 points in November. If the index rises, this indicates an improvement; a falling value is a sign of a weakening.

Industrial companies more optimistic

In industry, the business climate warmed slightly in November, it said. Companies once again assessed their current situation as slightly better than last month and revised their expectations for the coming months slightly upwards. This trend was also observed in the service sector.

Business climate in trade worsened

In contrast, the climate in trade worsened in November. Wholesalers assessed the current business situation as significantly better than in the previous month, while retailers were noticeably more pessimistic about current business than in October, it was reported. At the same time, wholesalers revised their expectations slightly downwards, while retailers did so considerably.

In the construction industry, the business climate index deteriorated slightly in November. Although companies rated current business slightly better than in the previous month, they were also noticeably more pessimistic about the coming months, the Ifo Institute reported.

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.