bvdm economic telegram December 2023: Business climate remains at a low level at the end of the year
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At the end of 2023, the seasonally and calendar-adjusted business climate in the German print and media industry showed a slight decline. While the business outlook for the next six months fell noticeably, assessments of the current business situation rose slightly. Adjusted for seasonal and calendar effects, the business climate index calculated by the German Printing and Media Industries Federation fell by 0.7 per cent compared to the previous month. At 86.5 points, the index in December was around 1.7 per cent below the previous year's level, marking the low for the year.
In December 2023, the decision-makers at printing and media companies surveyed by the ifo Institute assessed their current business situation as slightly better than in the previous month. In contrast, they were more pessimistic about developments in the coming months. Expectations regarding business development over the next six months thus broke the positive trend of the last three months and fell significantly. The characteristics of the current and expected business situation determine the development of the business climate, which is a good leading indicator for production development in the print and media industry.
The seasonally and calendar-adjusted business situation index recorded a slight increase in December compared to the previous month and, at 81.9 points, was around 0.9 per cent higher than in November. However, at around 7.0 per cent, the index was still significantly below the previous year's level. With an average index value of 81.8, the mood on the business floors of print and media companies in the last quarter of 2023 is therefore significantly gloomier and around 14.3 per cent below the average for the first quarter. The main reasons for this were the difficult order situation due to the economic situation and the lack of an overall economic recovery, as well as the ongoing cost pressure, which continues to force companies to charge comparatively high prices for print products. The more optimistic assessments of business development at the beginning of the year therefore failed to materialise in an improvement in the business situation over the course of the year.
In December, seasonally adjusted business expectations were more pessimistic than in the previous month; at 91.2 points, the seasonally adjusted index was around 2.2 per cent below the previous month's level. Only 10 per cent of companies stated that they expected their business situation to improve significantly over the next six months. Around 44 per cent of respondents expected their business situation to deteriorate over the next 6 months. The balance was therefore around 26 percentage points lower than expected.
