Business climate for German suppliers - November 2023

The business climate for German suppliers improved by 3.4 balance points in November. However, with a value of -12.2 points, the mood among companies remains poor. Although both the seasonally adjusted expectations for the next six months and the assessment of the current business situation are improving, it is doubtful that this will provide a decisive impetus to break the downturn of recent months.

While the seasonally adjusted assessment of the business situation rose by 1.6 balance points to -2.4, the increase in expectations was higher at 5.0 balance points. However, expectations are at a lower level. In November, the seasonally adjusted balance was -21.5 points.

It is questionable to what extent the information provided by German suppliers in November is reliable. While in the first half of the year, for example, the energy-intensive SME sector was presented with a largely disappointing energy cost relief package, uncertainty could hardly be greater now following the constitutional court ruling on the climate and transformation fund. Almost the entire economic and financial policy agenda of the German government is at stake. For the tax-paying German suppliers, who on the one hand are carrying out the transformation and on the other hand are making it possible in the first place, this disastrous budgetary situation in the midst of a weak economy and structural geo-economic upheaval is nothing less than disrespectful with unforeseeable consequences. Whether the many question marks can be cleared up by the end of the year is questionable in view of the gradually becoming clear dimensions of the budgetary inability of the actors involved.

The business climate index for the supplier industry is calculated by the supplier industry working group ArGeZ in collaboration with the Ifo Institute, Munich. It is based on a survey of around 600 companies and covers the foundry industry, aluminium industry, plastics processing, steel and metal processing, non-ferrous metals industry, rubber industry and technical textiles, all of which are members of the supplier industry working group.

Source: ArGeZ