Germany

Purchasing managers in the EMU are cautiously optimistic

At first glance, the mood among purchasing managers remains subdued at the beginning of the new year 2020 according to the survey by IHS Markit in the euro zone. The comprehensive composite purchasing managers‘ index on the situation in industry and services remained at the previous month’s level of 50.9 points in January according to the preliminary publication. In detail, however, the business outlook is brightening, probably also due to the initial de-escalation in the Pacific trade dispute. Another ray of hope is the development of incoming orders, which the purchasing managers surveyed are no longer as pessimistic as in previous months. At least for the rest of the year, this gives reason to hope that the economy in the euro zone has put the worst behind it and is continuing to stabilize. It is true that the dichotomy between weak industry on the one hand and a service sector,…

Industrial economy slows down growth of corporate loans in Germany

The economic problems in parts of German industry are increasingly reflected in the banks‘ lending business. As the results of the latest ECB Bank Lending Survey in Germany show, banks tightened their lending conditions for companies in the final quarter of 2019, for example by widening margins. Although the demand for credit from corporate customers continued to rise overall, this was not the case in the first quarter of 2019. However, growth was driven by small and medium-sized enterprises, while demand for loans from large companies actually declined. For the coming months, a clear majority of banks expect demand for loans from corporate customers to shrink. Compared to the October survey, the share of pessimistic banks has even increased, especially with regard to large companies. Even if no further tightening or even loosening of lending guidelines is planned for the time being, the growth of corporate loans on banks‘ books…

German companies enter the new year with hope

German companies hope that the year 2020, after two years of continuously weakening economic activity, will bring about a turnaround for the better. This is shown by the current ifo survey: at the end of 2019, the climate in the German executive floors is better than it has been since the summer months. The clearer outlook for Brexit and the progress made in the trade talks between the USA and China are giving German companies a sigh of relief and increasing confidence for 2020. Above all, the troubled export economy can hope for a recovery of the global economy and better business. Nevertheless, it should not be overlooked that the business climate index is still not far from its multi-year low from autumn. There are still no signs of any really more dynamic growth. After all, the almost two-year slide should at least be over now. Growth in Germany is…

Small and medium-sized businesses feel the effects of economic slowdown

The clouding over of the German economy has now also reached SMEs. This is shown by the results of the new SME study by DZ Bank and BVR. Business expectations have plummeted compared with the spring: The balance of expectations fell from 24.1 points in spring to only 0.4 points. This means that the optimistic and pessimistic business prospects of the medium-sized companies surveyed are now almost in balance. The assessment of the business situation did not decline so significantly. However, it fell for the third time in a row. SMEs in export-oriented industrial sectors in particular assessed their business situation significantly weaker than six months ago. The main reason for the current deterioration in sentiment is the consequences of the global economic slowdown. These also ensured that SMEs reduced their foreign commitments for the third time in succession. Nevertheless, more than half of them are still active abroad, which…

Economic slowdown reaches banks‘ lending business in Germany

The economic slowdown in Germany has now also reached the lending business. The extremely dynamic growth of banks‘ customer loans has slowed recently. From the end of September 2018 to the end of September 2019, loans to companies, private households and the state rose by 4.0 percent to EUR 2,928.2 billion. The strongest growth was again recorded in corporate loans. However, the increase slowed compared to the middle of the year. On the other hand, growth in private housing loans remained stable at a high level. The economic environment, which is characterised by a weakening industry, but a persistently good construction sector, is also reflected in the expectations of banks for the coming months. Most of them expect demand for corporate loans to fall and are planning to tighten their credit guidelines for these customers. The banks are more optimistic about the demand for credit from private households, for whom…

Industry continues to weigh on the mood of purchasing managers in the euro zone

  The data from IHS Markit’s November survey of European purchasing managers certainly does not indicate a mood of optimism. The comprehensive composite index fell by 0.3 points to 50.3 index points. Although the index for industry was able to gain, at 46.6 points it remained well below the neutral mark of 50 points. Industry is still suffering from declining demand, especially from abroad. However, the service sector, which is still growing, is increasingly threatened by the ongoing crisis in the industry. Here, employment intentions hardly increased at all. At 49.2 points, the German composite index remained below the neutral mark of 50 index points despite an improvement of 0.3 points. The mood among service providers declined slightly and was lower than it had been for more than three years. By contrast, the industrial index rose. Nevertheless, at 43.8 points, the index for industry remains below the growth threshold of…

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