Situation for German Automakers Improves Slightly

Business was somewhat better in the German automotive industry in September. The indicator for the industry rose to minus 5.4 points, up from minus 9.8 points. This is a finding of surveys by the ifo Institute. However, expectations dropped to minus 4.0 points, down from minus 0.6 points. “The automotive industry’s manufacturers and suppliers have a different take on the future,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. 

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Material Shortages in Germany Slightly Worse Again

The shortage of materials in German manufacturing has intensified. In September, 65.8 percent of the companies surveyed reported problems, up from 62.0 percent in August. This is a finding of the ifo Institute’s latest survey. “The hoped-for permanent easing has unfortunately failed to materialize,” says Klaus Wohlrabe, Head of Surveys at ifo. “This means that for now, the economy will lack support during the recession,” he adds.

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Energy Crisis: Inflation, Recession, Welfare Loss

The crisis on the gas markets is having a severe impact on the German economy. Soaring gas prices are drastically increasing energy costs, leading to a massive reduction of the purchasing power. Despite a decline in the second half of the year, gross domestic product is expected to expand by 1.4 percent this year. For the coming year, the institutes expect a contraction by 0.4 percent, followed by an increase of 1.9 percent in 2024.

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ifo Business Climate in Eastern Germany Cools Dramatically (September 2022)

Sentiment among companies in eastern Germany deteriorated drastically in September. The ifo Business Climate Index for the entire regional economy fell to 85.2 points, down from 90.9 points in August. This is its lowest value since May 2020. A steep downward trend was apparent both in participating companies’ assessments of the current situation and in their outlook.

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ifo Employment Barometer Falls (September 2022)

German companies’ willingness to hire is declining. The ifo Employment Barometer fell to 99.5 points in September, down from 100.9 points in August. However, companies are still looking to hire new employees, particularly in the service sector. Against the backdrop of the economic recession and with a view to the shortage of skilled workers, companies are focusing above all on retaining their employees.

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ifo Export Expectations Fall (September 2022)

Sentiment among German exporters has cooled. The ifo Export Expectations fell to minus 6.0 points in September, down from minus 2.8 points in August. This is its lowest level since May 2020. There is currently no sign of growth in exports and, as the global economy is slowing, there is also no reason to expect any major change in the medium term.

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