Panter Urges Caution Despite Saxony's High Spirits

After three years of ongoing crisis, Saxony’s Minister of Economic Affairs, Dirk Panter (SPD), sees a turnaround in the Free State’s economy. “It is particularly encouraging that the industrial and manufacturing sectors are also on the upswing again. This gives us hope and shows that our economy is regaining confidence,” said Panter, commenting on figures from the Ifo Institute in Dresden. The key now is to consolidate this positive trend and build on it to achieve sustainable growth.

Business Expectations Have Risen Significantly

According to Ifo, the institute’s business climate index rose to 92.2 points in October. In September, it had stood at 91.2 points. This marks the sixth consecutive month of growth. The surveyed companies thus assessed their current business situation as slightly better than in the previous month. However, they expressed significantly more optimism regarding their expectations. 
The business climate improved noticeably, particularly in the retail sector.

The index also performed slightly better than in the previous month in the manufacturing and service sectors. In the construction sector, on the other hand, the business climate cooled slightly in October.

A surge in confidence not seen in a long time

Panter highlighted the positive trends. “We haven’t seen such a marked improvement in business sentiment in Saxony in a long time. Companies are once again looking to the future with greater confidence—that is an important and encouraging sign. Saxony is thus following the positive trend in eastern Germany and nationwide.” Signs of an economic turnaround are becoming more pronounced.

Minister Believes a Nuanced Approach Is Necessary

However, Panter believes a nuanced approach is necessary. “The exceptionally strong increase is largely attributable to the fact that several large Saxon companies have significantly improved their assessments. Due to their high weighting, this has a correspondingly strong impact on the overall result. Caution is therefore still warranted, and we still have the task of supporting the Saxon economy as best we can.” 

The Ifo Business Climate Index for Eastern Germany is based on approximately 1,700 reports from companies in manufacturing, the service sector, retail, and the construction industry. It is considered an important leading indicator of economic activity. The Business Climate Index is composed of assessments of both the current situation and business expectations.