Economic Sentiment in Eastern Germany Stagnates, Auto Industry Outlook Worsens

The Ifo Institute reports mixed sectoral trends, with construction showing improvement while the automotive sector faces deepening challenges.

The Ifo Business Climate Index for Eastern Germany rose slightly to 87 points in December, up from 86.9 in November, but overall sentiment remains poor.
Construction in Eastern Germany showed significant improvement, driven by better business conditions and optimistic future expectations, supported by policy measures like tax breaks and lower interest rates.
Retail and wholesale sectors in Eastern Germany reported increased pessimism about future business prospects, contributing to a subdued outlook for the region.
The German automotive industry's business climate index dropped further to -34.7 points in December, with worsening expectations for both domestic and international markets.
A growing number of automotive companies are considering job cuts due to declining orders and deteriorating export prospects, reflecting continued strain on the sector.