Recent Updates

  • Australia: Job Vacancy Report (Jun)
  • Markit PMI: Manufacturing Survey - Australia, Japan (Jun)
  • New Zealand: International Trade, Trade by HS Commodity, Trade by Country by Commodity (Jun)
  • more updates...

Economy in Brief

Germany Business Confidence Falls Slightly in September: Retailers Particularly Pessimistic 
by Louise Curley September 27, 2004

German business confidence declined slightly in September. The Munich based IFO institute's confidence index (2000=100) fell to 95.3 in August to 95.2 in September, but was 2.37% above September, 2003. There was a slight improvement in business's appraisal of current conditions, from 94.7 to 94.8, but a decline in expectations for the next six month from 95.9 to 95.7.

In addition to the index, the institute also publishes diffusion indexes based on the balance between respondents who expect conditions to improve or remain the same and those who expect conditions to worsen. The diffusion indexes, are available for broad industry sectors, as well as for the total.

Business as a whole remains pessimistic. The balance for all business worsened from -10.3 to -10.4. Businessmen in manufacturing, the one sector where there is a balance of optimists over pessimists, became somewhat less optimistic as the positive balance declined in September from 4.4. to 4.1, but it was 9.1 points above the negative balance of 5.4 in September 2003. The balance of pessimists over optimists in the wholesale sector declined by 1.7 points in September and was 5.1 points below the figure for a year ago. The balance of pessimists rose in both the construction and retail sectors, but while the balance in construction was only nominally below the year ago figure, that of the retail sector was 12.5 points lower.

The attached chart showing the balances for the important retail and manufacturing sectors suggests little, if any, signs that the German economy and, particularly, consumer spending are about to accelerate soon.

IFO Indexes  and % Balance of Optimists over Pessimists Sep 04 Aug 04 Sep 03 M/M % Y/Y % 2003 %  2002 %   2001 %
Index (2000=100)              
Business Climate 95.2 95.3 93.0 -0.1 2.37 91.7 89.4 92.1
Current Conditions 94.8 94.7 88.3 0.11 7.36 88.4 85.2 93.1
Expectations (Next 6 months) 95.7 95.9 98.0 -0.21 -2.35 95.1 93.9 91.0
% Balance pts pts
Total -10.4 -10.3 -14.8 -0.1 4.4 -17.5 -22.0 -16.7
  Manufacturing 4.1 4.4 -5.4 -0.3 9.1 -7.9 -10.3 -10.2
  Construction -45.6 -45.0 -45.3 -0.6 -0.3 -42.8 -44.4 -38.2
  Wholesale trade -15.2 -16.9 -20.4 1.7 5.2 -24.9 -29.8 -20.8
  Retail trade -31.1 -30.2 -18.8 -1.1 -12.5 -25.4 -40.1 -20.5
close
large image