bvdm economic telegram April 2023: Improved business outlook compensates for decline in business inventories

In April 2023, decision-makers at printing and media companies surveyed by the Ifo Institute again assessed their current business situation as slightly worse than in the previous month. In contrast, the positive trend in expectations regarding business development over the next six months continued. The values for the business climate therefore continued to rise. 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.

The seasonally adjusted business situation index recorded a slight decline of around 1.6 per cent in April compared to the previous month. The index stood at around 94.6 points, some 7.8 per cent down on the same month last year. About 17 per cent of the business leaders surveyed assessed the current business situation positively in April, while about 56 per cent were neutral and 27 per cent negative. Although capacity utilisation rose to an average of 79.9 percent, it was still below the previous year's values with a difference of around 4 percentage points due to the comparatively low order situation. In April, around 67 percent of the companies surveyed said they were suffering from production constraints. This was around 24 percentage points less than in the same month last year. The most important factors cited were the lack of orders (46 percent) and the lack of skilled workers (45 percent). The dominant factor in the previous year, the shortage of materials (4 per cent), only played a subordinate role. The weighted materials shortage index calculated by the bvdm fell by 58 per cent year-on-year to its lowest level since the end of the corona pandemic.

The expectations of companies in the print and media industry regarding the future business situation improved again in April of 2023. At a seasonally adjusted 99.5 points, the index was around 2.4 per cent above the previous month's level. In a year-on-year comparison, the index of the business outlook for the next 6 months is thus about 12.1 percent above the values of the same month last year. However, this has to be assessed in the context of the statistical basis. Due to the turbulent events in 2022, business expectations had slumped in the same month last year. The high cost of input goods and operating supplies continues to be a key challenge for the pricing of print and media businesses. Initial indicators here point to a break in the trend in the near future. Expectations of sales price development were negative on balance by around 7.5 percentage points. It remains to be seen, however, to what extent this development will have a positive effect on the generation of new orders among print and media companies.