Sentiment in the German export industry continues to worsen. The ifo Export Expectations fell to minus 6.7 points in October, down from minus 6.5 points in September. 'Companies are not currently benefiting from the positive economic development in other countries,' says Klaus Wohlrabe, Head of ifo Surveys. 'The lean period for the export industry is continuing as a result.'
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The industry is primarily predicting a drop in international business. The automotive and metal industries fear the heaviest losses. Food and beverage manufacturers, on the other hand, expect exports to rise. Paper manufacturers also anticipate a slightly positive trend. The expectations of manufacturers of electrical equipment have brightened considerably: After recently planning declines, they now expect export business to remain constant.
However, in spite of Export Expectations falling, ifo has announced the German Business Climate Index are rising. Sentiment among companies in Germany has improved. The ifo Business Climate Index rose in October to 86.5 points, up from 85.4 points in September. This is the first increase after four decreases in a row. Companies were more satisfied with their current situation. Expectations were brighter but marked by scepticism. The German economy stopped the decline for the time being.
In manufacturing, the downward trend did not continue in this month. This was due to noticeably less pessimistic expectations by the companies. However, they assessed the current business situation as considerably worse. The lack of orders remains a core problem. Capacity utilisation fell by 1.2 percentage points and, at 76.5 percent, is significantly below the long-term mean of 83.4 percent.
In trade, the Index rose somewhat. While expectations improved slightly at a low level, the companies were less satisfied with the current business situation.
In construction, the business climate worsened. This was due to more pessimistic expectations by the companies. They did, however, assess the current business situation as somewhat better.
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