Ifo Institute: Business Climate In German Automotive Industry Slightly Worse

cie automotive

The business climate in Germany’s automotive industry has worsened slightly. The ifo barometer for the industry fell to 8.5 points, down from 9.8 points in September. In July, the indicator had stood at 28.7 points. “Manufacturers and their suppliers have very different takes on the current situation,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.

Business for manufacturers continues to be very good; the indicator of their current business situation rose from 29.9 points in September to 46.2 points. “Sales markets abroad are still doing splendidly,” Falck says. The indicator for exports did slip, but only to a still satisfactory 30.5 points. Manufacturers’ order books are full and they expect to increase production. “However, all manufacturers were still complaining about supply shortages,” Falck adds.

For suppliers, meanwhile, the situation remains much less favorable. The indicator is still in negative territory after improving marginally from minus 11.5 points in September to minus 9.8 points. Suppliers are complaining about a lack of orders and demand is declining. They don’t expect much of a tailwind in the export business: the indicator rose to 1.8 points, up from minus 1.8 points in September. Production expectations remain cautious at plus 4.3 points, up from minus 1.3 points in September. “The figures reflect many suppliers’ concerns that they won’t be able to keep up with the structural change in the automotive industry,” Falck explains.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.