bvdm economic telegram August 2023 - Business climate continues to weaken

In August 2023, decision-makers at printing and media companies surveyed by the Ifo Institute again assessed their current business situation as worse than in the previous month. Analogously, expectations regarding business development over the next six months also declined further. The values for the business climate therefore fell again compared to the previous month. The business climate, which is a good leading indicator for the production trend in the print and media industry, is determined by the current and expected business situation.

The seasonally and calendar-adjusted business situation index fell for the third month in succession and stood at 86.9 points, some 0.8 per cent below the previous month's figure. The index was thus around 5.8 per cent below the corresponding year-earlier level, continuing the phase of weakness that has persisted since May 2023.

56 percent of the business leaders surveyed assessed their company's current business situation as neutral in August. Around 11 percent assessed the situation positively, while around 33 percent took a negative position. The balance was around -26 percentage points, some 13 percentage points below the previous year's figure.

After the expectations of companies in the print and media industry with regard to the future business situation had already fallen significantly in July, this development continued in August. At a seasonally adjusted 87.2 points, the index was around 3.1 per cent below the previous month's level. This marks the end of the period of cautiously optimistic assessments that has prevailed since the beginning of the year for companies in the print and media industry, with the index once again quoting at the level of December 2023. In a direct year-on-year comparison, the business outlook index remained above the corresponding year-earlier figure with an increase of 9.6 per cent, but this is primarily attributable to statistical basis effects. Only a few companies (7 percent) indicated that they expected a significant improvement in their business situation in the next 6 months. An overwhelming share of respondents (58 percent) expected the situation to remain unchanged, while about 35 percent expected their business situation to worsen. Expectations with regard to the development of employment also fell, with a balance of -14 percent.