Industry and Construction in Eastern Germany Are Becoming More Optimistic

Sentiment in the East German economy continues to improve. According to the Ifo Institute in Dresden, the business climate index rose to 89.9 points in August. In the previous month, the sentiment barometer for the regional economy of eastern Germany stood at 89.1 points. While the surveyed companies assessed their current business situation as slightly worse, they were at the same time significantly more optimistic about their business outlook.

The business climate improved considerably, particularly in the manufacturing and construction sectors. Both industries, in particular, looked to the future business outlook with significantly greater optimism. In contrast, the business climate in the service sector and retail trade deteriorated slightly. 

The Ifo Business Climate Index for eastern Germany is based on approximately 1,700 reports from companies in industry, the service sector, retail, and the construction industry. It is considered an important leading indicator of economic activity.

The Ifo Index for the German economy as a whole had also risen recently. It increased in August for the fourth consecutive month and signals an improvement in business sentiment, which remains robust despite the war in Iran and the oil price shock.