Despite a renewed rise in the number of corona infections, overall sentiment in the German economy continues to brighten, according to the widely-watched ifo business climate index, which rose again in September. The construction and real estate sectors, among others, are taking a more buoyant view of their “Current Situation”, say the latest indicators.
For the construction industry, the figures are the highest since March and the introduction of the lockdown. The same applies to the real estate sector, which ifo classifies under “Real Estate and Housing”.
When it comes to the “Business Outlook”, however, which assesses future expectations, the two sectors of the economy differ. While the construction industry is somewhat more optimistic in its business expectations with a value of -17.2 points compared to August (-20.3 points), the business expectations of the real estate industry have fallen from 7.7 to 1.1 points, but remain positive.
Companies’ assessment of their order backlogs, a key indicator for the construction industry, is significantly better than in August. Capacity utilization has remained constant at 4.2 months, and the willingness to hire has increased once again.
The ifo business climate index is regarded in Germany as an important leading economic indicator. Every month, around 9,000 companies are surveyed to assess their economic situation. In September, the overall economic index rose to 93.4 points from 92.5 points in August, driven largely by the manufacturing sector.
