German business climate improves again in September - survey

24 September 2010 18:05  [Source: ICIS news]

TORONTO (ICIS)--Germany’s business climate improved again in September as firms were more satisfied with their situation than in the previous month, a research institute said on Friday.

Ifo institute’s widely followed business climate index for Germany rose slightly to 106.8 points, from 106.7 points in August – the fourth increase in a row.

The index is based on a survey of some 7,000 executives in manufacturing, construction, wholesaling and retailing.

“For the near future, [firms] continue to be optimistic, although not quite as much as in August,” said Ifo.

Ifo said that in manufacturing, producers still saw good prospects for exports, but no longer expected the fast expansion of previous months.

Manufacturers’ employment plans were “marginally more reserved” than in August, but layoffs were generally not expected, the institute said.

Germany’s chemical employers group, BAVC, warned in an economic update earlier this week of slower growth in the chemical industry in the second half of the year.

Government stimulus measures had expired and public budgets were under pressure, auguring a slowdown in growth, the group said.

Also, GDP growth in the US and China – two global “growth motors” in the past – was lagging, it added.

While 2010 would clearly be much better for Germany's chemical producers than the 2009 disaster year”, there was no cause for euphoria, BAVC said.

Germany's chemical industry was typically an “early beneficiary” in times of rising GDP and increasing exports – which explained the industry strong first-half performance. However, chemical producers also suffered disproportionately in times of decline, it added.

Germany’s full-year 2010 chemical production is projected to rise 11%, according to the latest projection by chemical producers group VCI. The growth would come after a 10% decline in 2009 from 2008.

The country’s GDP growth has been put at up to 3.4% for the full year.

For more on German chemical producers like BASF, visit ICIS company intelligence
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By: Stefan Baumgarten
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