The mood in the East German economy deteriorated significantly in July. The regularly surveyed business climate index for the regional economy fell to 91.4 points, as the Dresden branch of the Munich Ifo Institute announced on Friday. In June, the value was still 93.4 points. The mood barometer fell for the third time in a row. The Ifo Institute assumes that the bad mood is related, among other things, to rising interest rates and high inflation.
The companies surveyed said they were noticeably less satisfied with their current business and slightly reduced their business expectations for the next six months. In manufacturing, the business climate cooled off significantly. The companies also rated the business situation less positively than in the previous month. At the same time, the outlook for the next six months darkened. Sentiment in the service sector fell slightly, and companies’ assessments of the situation and business expectations deteriorated.
The mood in retail also fell. Current business rated companies worse than in the previous month, as did the outlook. In construction, the business climate cooled slightly. While the assessment of the situation was reduced significantly, expectations improved slightly.
For the Ifo business climate, 1,700 East German companies from various sectors are surveyed every month about their business situation and the outlook for the next six months. The index is a leading indicator for economic development.
