GERMAN ECONOMY
Ifo Institute: Firms express less pessimism after terrible March poll result / Material shortages ease / Decline in number of companies worried about survival
 German manufacturers report a slight improvement in raw material supplies (Foto: Panthermedia/monticello) |
German business confidence rebounded slightly in April after the outlook in the previous month fell at a record pace, and material shortages in the country have eased, according to domestic economic thinktank ifo Institute (Munich; www.ifo.de).
Ifo’s monthly poll of German business leaders showed an improvement in the headline business climate index to 91.8 points in April from 90.8 in the previous month (see Plasteurope.com of 28.03.2022).
“After the initial shock of the Russian attack, the German economy has shown its resilience,” ifo said.
Most of the gain in the index came from the improvement in the expectations component, a reading for the next six months. The current situation component was little changed, ifo said.
Ifo’s monthly poll of German business leaders showed an improvement in the headline business climate index to 91.8 points in April from 90.8 in the previous month (see Plasteurope.com of 28.03.2022).
“After the initial shock of the Russian attack, the German economy has shown its resilience,” ifo said.
Most of the gain in the index came from the improvement in the expectations component, a reading for the next six months. The current situation component was little changed, ifo said.
Fewer firms report supply issues
The supply situation improved in April, but a wide majority of companies responding to the latest ifo poll on the subject reported problems. Some 75% complained about bottlenecks and procurement issues for preliminary products and raw materials, which was better than over 80% in March (see Plasteurope.com of 06.04.2022).
“It would be wrong to describe the situation as completely relaxed,” said Klaus Wohlrabe, ifo’s head of surveys. “In addition to the war in Ukraine, China is a growing cause for concern.”
Nearly 92% of data processing equipment manufacturers said they suffered supply issues, making it the most-affected sector in April. In the car industry, the proportion was also high at more than 89%.
Manufacturers of rubber and plastic goods reported an improvement, with only around 73% admitting concerns in April versus nearly 79% in March and some 76% in February. In the chemical industry, the proportion dropped to below 62% from around 70% in March.
“Right now, there are no signs that there will be substantial relief in the coming months,” Wohlrabe added.
“It would be wrong to describe the situation as completely relaxed,” said Klaus Wohlrabe, ifo’s head of surveys. “In addition to the war in Ukraine, China is a growing cause for concern.”
Nearly 92% of data processing equipment manufacturers said they suffered supply issues, making it the most-affected sector in April. In the car industry, the proportion was also high at more than 89%.
Manufacturers of rubber and plastic goods reported an improvement, with only around 73% admitting concerns in April versus nearly 79% in March and some 76% in February. In the chemical industry, the proportion dropped to below 62% from around 70% in March.
“Right now, there are no signs that there will be substantial relief in the coming months,” Wohlrabe added.
Threats of bankruptcy abate
Far fewer German companies fear for their survival despite Russia’s attack on Ukraine, according to another institute survey.
Ifo said only 7.1% of companies reported that they feared for their existence, which was almost half of the nearly 14% in January.
“However, sectors that have been hit particularly hard by the coronavirus pandemic still feel threatened. These include the hospitality and event industries, where almost 25% of companies are reporting concerns over their survival,” Wohlrabe noted.
In manufacturing, only 4.9% of companies said they were concerned about their survival compared to 5.6% in January. Producers of plastics and rubber goods were even less pessimistic, with only 3% expressing such worries following a result of nearly 10% in December (see Plasteurope.com of 13.01.2022).
Things were more difficult for companies in the textile industry, with nearly 37% raising concerns in April.
“The high level of uncertainty generated by the war in Ukraine hasn’t triggered an increase in survival fears in the key sectors,” Wohlrabe said. “Manufacturing order books remain full.”
Ifo said only 7.1% of companies reported that they feared for their existence, which was almost half of the nearly 14% in January.
“However, sectors that have been hit particularly hard by the coronavirus pandemic still feel threatened. These include the hospitality and event industries, where almost 25% of companies are reporting concerns over their survival,” Wohlrabe noted.
In manufacturing, only 4.9% of companies said they were concerned about their survival compared to 5.6% in January. Producers of plastics and rubber goods were even less pessimistic, with only 3% expressing such worries following a result of nearly 10% in December (see Plasteurope.com of 13.01.2022).
Things were more difficult for companies in the textile industry, with nearly 37% raising concerns in April.
“The high level of uncertainty generated by the war in Ukraine hasn’t triggered an increase in survival fears in the key sectors,” Wohlrabe said. “Manufacturing order books remain full.”
03.05.2022 Plasteurope.com [250191-0]
Published on 03.05.2022
German version of this article...