Ifo Institute: Business climate in the East stagnates

The mood in the eastern German economy remains predominantly poor. The business climate index for eastern Germany rose slightly to 87 points in December, according to the Ifo Institute in Dresden. In November, the value was 86.9. The companies surveyed assessed their business situation as unchanged compared to November, while business expectations were slightly more pessimistic.

Good mood only in the construction industry

In eastern German trade and manufacturing, the business climate deteriorated slightly in December. Retailers assessed their business expectations slightly less favorably, while wholesalers were noticeably more pessimistic about their future business performance.

In contrast, sentiment in the main construction industry in eastern Germany rose significantly. The construction companies surveyed stated that their business situation had improved considerably. At the same time, they noticeably raised their expectations for future business development.

The German Institute for Economic Research (DIW) also announced a turnaround in the ailing construction industry in January. Among other things, it cited political measures such as tax breaks for new residential construction and lower interest rates as reasons for this.

The Ifo Business Climate East Germany is based on around 1,700 reports from companies. Every month, it asks about the current business situation and expectations for the next six months.