Ifo Institute: Business climate in the East continues to cool down

The mood in the East German economy deteriorated again slightly in March. According to the Ifo Institute in Dresden, the business climate index fell from 89.3 points in February to 88.9 points. Companies assessed their current situation as significantly better than in the previous month, but at the same time significantly lowered their expectations for the coming months.

Industry and service providers with subdued expectations

This trend also applies to industry and service providers. The business climate cooled somewhat in both sectors in March. Although the manufacturing industry and the service sector assessed their current business somewhat better than a month earlier, they were more pessimistic about the next three months.

Trade and construction with a slightly better climate

Slight improvements in the business climate were recorded in trade and construction in March. Both wholesalers and retailers assessed their current business situation as significantly better than in February. At the same time, companies lowered their expectations somewhat.

Construction companies reported a strong improvement in their current business. At the same time, pessimism for the coming months increased considerably.

Indicator for the economy

The Ifo Business Climate Index for eastern Germany is based on around 1,700 monthly reports from companies in industry, the service sector, trade and construction and is considered an important early indicator for economic development.