ifo business climate index fell from 86.9 points in December to 85.5 points in January

The ifo Institute’s business climate index (https://www.ifo.de) for eastern Germany fell in January compared to the previous month. The sentiment barometer for the region’s economy fell to 85.5 points, down from 86.9 in December.

Service sector declines

In eastern German manufacturing, the business climate deteriorated very significantly in January. The industrial companies surveyed assessed their current business situation as noticeably worse than in the previous month. By contrast, scepticism regarding business expectations increased very sharply.

In the service sector, the business climate deteriorated slightly in January. The service companies surveyed slightly raised their assessment of their current business and at the same time assessed their business expectations for the coming months somewhat more pessimistically.

Optimism returns to trade sector

The picture is different in the trade sector. The business situation was assessed much better by the trade sector as a whole than in the previous month. While the climate indicator for retail trade improved markedly, the business climate in wholesale trade cooled down slightly. Retailers assessed their business expectations slightly more positively, while wholesalers were a little less optimistic.

The construction industry in eastern Germany remains divided. Here, the business climate remained unchanged in January. The companies surveyed stated that their business situation had improved considerably. However, they significantly lowered their expectations for future business performance.