Business Climate in Germany Improves for Solo Self-Employed Persons and Microenterprises

The business climate for microenterprises and solo self-employed persons in Germany has improved, according to the latest index for this segment (“Jimdo-ifo Business Climate Index”). This index rose to minus 1.1 points (not seasonally adjusted) in June, up from minus 2.5 points in May. “Business is considerably better,” says Klaus Wohlrabe, Head of Surveys at ifo, “but there are still major concerns with regard to the second half of the year.”

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Food Prices Set to Rise Again in Germany

Germans will have to brace themselves for further food price increases over the next few months. According to an ifo survey conducted in June among food, beverage, and tobacco retailers, price expectations are at 98.9 points, which means that almost all the retailers surveyed are planning to raise prices. The majority of the surveyed retailers in the other segments also intend to put prices up: their price expectations rose to 78.6 points, up from 75.5 points. “We can therefore expect inflation rates to remain high for the time being,” says Timo Wollmershäuser, Head of Forecasts at ifo.

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ifo Business Climate Eastern Germany (June 2022)

Die Stimmung der ostdeutschen Unternehmen sank im Juni leicht. Der ifo Geschäftsklimaindex für die gesamte regionale Wirtschaft ging zurück auf 94,1 Punkte, nach 94,5 Punkten im Mai. Die Lageeinschätzungen der Befragungsteilnehmer verbesserten sich geringfügig. Gleichzeitig senkten sie ihren Ausblick leicht. Die Lücke zwischen Lage und Erwartungen wird größer. Dies ist Ausdruck großer Unsicherheit.

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Companies in Germany Expect Material Shortages to Last until 2023

The shortage of materials in German manufacturing will continue for at least another 10 months, according to companies surveyed by the ifo Institute. At the same time, 74.1 percent of companies complained about bottlenecks and problems procuring intermediate products and raw materials in June. The figure was 77.2 percent in May. “The hoped-for easing in supply chains is constantly getting pushed back,” says Klaus Wohlrabe, Head of Surveys at ifo. “Supply bottlenecks are now unfortunately part of everyday life for many companies.”

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ifo Economic Forecast for Eastern Germany and Saxony: Robust Despite Turbulence

  The outlook for the global economy has deteriorated significantly since December 2021. Nevertheless, the economy in eastern Germany and Saxony is likely to continue expanding. In the current year, economic output in those regions will grow by 2.9 and 1.8 percent respectively (Germany: 2.5 percent). Assuming that it is still possible to avoid an undersupply of natural gas this coming winter, economic output in eastern Germany is likely to be 3.5 percent higher year over year in 2023; in Saxony, gross domestic product will increase by 3.3 percent (Germany: 3.7 percent). 

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ifo Employment Barometer Falls (June 2022)

German companies are becoming more reluctant to hire new staff. The ifo Employment Barometer fell to 103.3 points in June, down from 104.0 points in May. Yet, demand for labor remains high. The shortage of skilled workers is still a key problem for German companies.

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