bvdm economic telegram February 2021: Hopes of an imminent easing of the Corona measures brighten industry expectations

The business climate index calculated by the Bundesverband Druck und Medien rose by a seasonally adjusted 4.5 percent to 93.2 points compared with the previous month. Hopeful expectations regarding an imminent easing of the current Corona measures are likely to be primarily responsible for the latest improvement. Nevertheless, the index is still well below its year-earlier level - down 8.1 percent.

In February, the print and media companies surveyed by the ifo Institute were more positive in their assessment of both their current business situation and their expectations regarding their future business development than in January. The values 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.

After the seasonally adjusted business situation index had fallen significantly in January (-8.2 percent) compared to the previous month, it increased by 3.2 rocent to 83.2 points in February. However, this comparatively moderate increase compared with January hardly reduced the year-on-year decline observed - the year-on-year drop remains very high at around 18 percent. A key reason for this decline is the persistently weak development in demand. For example, around 53 percent of respondents currently state that demand for their products has recently deteriorated, whereas only around 11 rocent report an improvement.

The print and media companies are much more optimistic about their expected business development over the next six months than about their current situation. The corresponding seasonally adjusted business expectations index rose by 5.8 percent in February to 104.5 points, the fourth highest level since the outbreak of the Corona crisis. The index also increased by 2.6 points year-on-year. The declining corona incidence figures for much of February, and the accompanying expectations of an imminent easing of corona-related restriction measures, appear to be giving companies hope at present. In February, for example, 31 percent of participants expected their business situation to develop favorably in the coming months. Some 22 percent of companies, meanwhile, expected a weaker future business situation. These are likely to be primarily concerned with the risks of a third Corona wave.