German business sentiment experiences rebound in October
Date
10/27/2024 5:31:49 AM
(MENAFN) Germany’s business sentiment experienced a rebound in October, ending a streak of four consecutive months of decline, according to the latest report from the ifo Institute released on Friday. The ifo Business Climate Index rose from 85.4 points in September to 86.5 points in October, signaling a slight improvement in the overall business outlook among German companies.
This uptick in the index is attributed primarily to less pessimistic expectations within the manufacturing sector, where the index for business expectations increased from minus 21.4 to minus 20.6. However, the current assessment of the business situation in manufacturing remains unfavorable, highlighting ongoing challenges. A key issue facing this sector is the persistent lack of orders, which has contributed to a decrease in capacity utilization, now at 76.5 percent, down 1.2 percentage points and significantly below the long-term average of 83.4 percent.
In contrast, the services sector demonstrated improved sentiment, with the business climate index rising from minus 3.5 to 0.1. This positive shift reflects increased satisfaction among companies in logistics, tourism, and IT, coupled with a rise in expectations for future performance. Conversely, the trade sector saw a slight increase in sentiment, with the index moving from minus 29.8 to minus 29.3, indicating marginally improved expectations despite companies expressing less overall satisfaction.
However, the construction sector reported a decline in sentiment, falling from minus 25.3 to minus 25.7. The ifo Institute noted that this decrease was primarily due to more pessimistic expectations among companies, even though they evaluated the current business situation as somewhat better. This mixed outlook across different sectors highlights the complexities facing Germany’s economy as it navigates challenges and opportunities in the current business environment.
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