Corona Crisis Hope for German Automotive Industry
Initial indications have appeared among German automotive companies that business is picking up again. Although there is still very weak growth in terms of staffing levels, demand has increased over the last month. This is the finding of the ifo Institute’s latest Business Survey.
Business expectations improved considerably for the second consecutive month in July, rising to 43.7 points from 26.9 points in June. Carmakers also expect their exports to grow; the indicator rose to 40.8 points in July from 17.3 points in June.
However, the indicator of the current business situation was still negative in July, rising from minus 81.9 points in June to minus 65.5 points. “Headcount developments remain worrying,” says Klaus Wohlrabe, Head of Surveys at ifo. Personnel planning rose only weakly to minus 53.3 points from minus 54.4 points in June. That is still worse than during the financial crisis, when the indicator fell to minus 50.0 in April 2009.
Demand strengthened somewhat compared to the previous month, going up to 63.2 points from 52.1 points in June. This increased demand could often be met from the warehouse. The corresponding index fell to plus 30.6 points in July from plus 40.2 points in June. Order books rose from 13.3 points in June to 25.5 points in July. Production expectations rose for the third month in a row to plus 50.6 points from plus 48.8 points in June.