Does it really say that?:
Ifo Konjunkturperspektiven 7/2009
Results of the Ifo Business Survey for July 2009
Manufacturing: Outlook continues to brighten
In manufacturing (including food and beverages) the business climate indicator rose again. For the seventh time in succession the sceptical responses regarding the business expectations declined. However, there was little change in the unfavourable business situation; in comparison to the previous month only a slightly smaller number of firms reported an unsatisfactory business situation. The decrease in demand has almost come to a standstill according to the responses of the survey participants, and finished goods inventories have again been reduced. Considerably fewer firms assessed order reserves as "too small"; the depth of orders on hand, however, at 2.3 months is still clearly below the previous year level (3.0 months). Equipment and machinery was utilised at a 71.8% rate, on average, which was lower than twelve months ago (86.0%), in comparison to the first quarter (71.3%), however, the utilisation rate has recovered somewhat. Firms' production plans call for fewer restrictions than in June. Only a small number of survey participants still expect the decline in export business to continue.
Construction: Slightly improved business climate
The business climate in construction was a little more favourable in July than in the previous month. The contractors participating in the Ifo Business Survey were less dissatisfied with the current business situation; with regard to business developments in the next six months, their reserve has also decreased somewhat. Almost 40% of the survey participants reported hindrances in building activity, the largest factor being insufficient orders. The equipment utilization rate rose one percentage point to 69% (seasonally and weather adjusted), thus matching the previous year value. The depth of order stocks increased insignificantly to 2.4 months (seasonally and weather adjusted) on average for all construction sectors; a year ago the order cushion was somewhat larger (2.5 months). The survey responses indicate that prices remained under pressure in July. In the opinion of the survey participants, they will have to lower prices only moderately in the coming months, however. Personnel reductions in the coming months are only planned to a small extent.
Wholesaling: Declining scepticism
The business climate in the wholesale trade improved again in July. In comparison to June, the firms were less often dissatisfied with the business situation. In individual cases too high inventories have been reduced. The scepticism with regard to future developments continued to weaken. In light of the less negative business outlook, the survey participants have upped their order plans, which, however, are still lower than one year ago. Restrictions are also evident in their employment plans. Prices are expected to increase in the coming months, in the opinion of the wholesalers.
Retailing: More favourable business situation
The business climate in retailing worsened slightly in July. This is because the firms have assessed their six-month business outlook more unfavourably than in June. Their current business situation, however, is regarded as almost satisfactory and thus clearly more positive than in June. Although the retailers more frequently assessed their inventories as too large, they do not intend to be as restrictive in their order plans as before. Once more, fewer firms reported having to make price concessions. For the coming months the survey results indicate that prices will remain stable. The number of employees in retailing is also expected to undergo little change.
Services: Climate indicator rises
The Ifo Business Climate for the service sector (excluding trade, banking, leasing, insurance and the public sector) improved in July. The surveyed firms assessed their current business situation less unfavourably than in June but expect only a minimal growth in turnover in the near future. In their business expectations for the coming half year, scepticism has weakened further, however. The service providers anticipate an unchanged business situation in the coming months. Their personnel plans foresee no changes in staff levels."