German automotive industry sentiment increases in July, although employment still weak

Author: Morgan Condon

2020/08/04

LONDON (ICIS)--The German automotive industry showed signs of gaining strength for the second consecutive month in July, according to the latest data from the ifo Institute business survey on Tuesday.

Business expectations for the sector rose to 43.7 points in July from 26.9 points in June, supported by growth in export expectations, which climbed to 40.8 points in July from 17.3 points the previous month.

Demand tracked more modest growth, rising to 63.2 points from 52.1 points, with this pick-up mainly met from stocks in warehouses, with the corresponding index falling from 40.2 points to 30.6 points in July.

Order books also marked an increase from 13.3 points to 25.5 points, and production expectations rose for the third month in a row from 48.8 points to 50.6 points in July.

Signs of a recovery were tempered by negative sentiment about the current business situation, which rose from -81.9 points to -65.5 points.

The most worrying indicator was in employment, which tracked a minimal increase from -54.4 points to -53.3 points, which remains worse than during the financial crisis, when the indicator fell to -50.0 in April 2009.

Front page picture: Vehicles at a Volkswagen facility in Zwickau, eastern Germany; archive image
Source: Jens Meyer/AP/Shutterstock