bvdm- Business Telegram May 2023 - Sideways Movement in Business Climate; Business Expectations Decline

In May 2023, decision-makers at print and media companies surveyed by the Ifo Institute assessed their current business situation as slightly better than in the previous month. In contrast, the positive trend in expectations regarding business development over the next six months broke off. The values for the business climate therefore stagnated with a negative sign. The characteristics of the current and expected business situation determine the development of the business climate, which is a good leading indicator for the production development of the print and media industry.

While the seasonally and calendar-adjusted business situation index declined in April, it increased in May and at 96.4 points was around 1.9 per cent above the previous month's figure. Despite this increase, the index was still 5.3 percent below the previous year's level. The majority (60 percent) of the business leaders surveyed assessed their company's current business situation as neutral in May. Around 16 assessed the situation positively, while around 24 percent took a negative position. As before, the order situation represented the biggest challenge for companies in the print and media industry. In May, around 50 per cent of the business leaders surveyed rated their current order backlog as "too small". 45 per cent assessed the order situation as sufficient, while around 5 per cent rated it as good. Compared to the previous year, this represents a deterioration. Compared to May 2022, the netted values decline by 31 percentage points. The assessment of the earnings situation also declined compared to the previous year. While in May 2023 around 38 percent of respondents reported a poor earnings situation and 14 reported a good earnings situation, in May 2022 the figures were around 23 percent and 17 percent respectively. Compared to the previous year, this represents a decline in the balance of around 17 percentage points.

After the expectations of companies in the print and media industry with regard to the future business situation had risen in April, the expectations of companies developed somewhat more pessimistically in May. At a seasonally adjusted 95.2 points, the index was around 3.5 per cent below the previous month's level. In a year-on-year comparison, the business outlook index was thus roughly at the same level as in the same month of the previous year. In view of the sideways movement of the overall economy and the continuing burdens, only a few companies (12 percent) saw a significant improvement in their business situation in the next 6 months. An overwhelming proportion of respondents (61.4 percent) expected the situation to remain unchanged, while around 27 percent were pessimistic about the development.