Business Climate in Germany’s Chemical Industry Considerably Improved
“... a glimmer of hope is finally emerging again for the first time in a long while”
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The business climate in Germany’s chemical industry improved significantly in June. The Business Climate Index rose to -17.8 points, up from -29.0* points in May. Companies assessed the business situation as considerably better. The figure rose to -2.9 points, up from -16.5* points in May. Business expectations were also considerably brighter, rising from -40.7* to -31.5 points. “The business climate in the chemical industry is benefiting from slight declines in the prices for energy and certain intermediate products following the emerging easing of tensions in the Middle East conflict,” says ifo industry expert Anna Wolf.
According to the ifo expert, a one-time effect in international trade is responsible for the improved figures: Due to missed deliveries from the Middle East and the fact that Asia has been particularly hard hit by that, demand for chemical products is shifting to German manufacturers. Companies also received more orders in June than in the previous month, and production stabilized. At the same time, chemical companies are hoping for more exports than in the previous month: The figure rose to -4.8 points, up from -16.1* points in May. However, the supply of intermediate goods remains tense. The majority of companies expect prices to rise again in the coming months. “It’s still too soon to talk of a sustainable turnaround,” says Wolf. “But a glimmer of hope is finally emerging again for the first time in a long while.”
*Seasonally adjusted