The German wholesale sector reported a slight improvement in business climate in June 2024, according to new data from the ifo Institute.
According to the data, which measures the current market climate for the wholesale of raw materials, intermediate products, machinery and equipment in Germany, the business sentiment index rose to -16.7 points in June, up from -20.5 in May.
“One reason for this could be construction-related trade,” commented ifo industry expert Ulrike Mandalka. “This is where the German government’s special fund for infrastructure raises hope for fresh impetus. Industrial customers are also counting on increased demand thanks to the planned accelerated depreciation, tax cuts, and lower grid fees.”
The climate for wholesalers in production-related business-to-business sectors rose from -17.7 points to -15.1 points, while business expectations rose from -23.3 points to -18.3 points.
Overall, however, despite these improvements, companies remain ‘sceptical’, the ifo Institute noted, a factor that is reflected in planned job cuts, which are continuing, albeit at a slightly slower pace than in May.
Read more: Consumer sentiment in Germany ‘improving’, says HDE
Consumer goods wholesale
Consumer goods wholesalers also reported improved sentiment, with the climate index rising from -13.5 to -11.1. The current business conditions index improved slightly to -12.8 (from -13.7), while expectations rose to -9.5 (from -13.4).
“Private households are spending slightly more on their consumption,” commented Mandalka. “That gives companies hope again.”
At the same time, this is not being reflected in personnel planning, with retailers expecting staff reductions to increase further, the ifo Institute added. Read more here.
