bvdm economic telegram January 2021: Second Corona wave worsens industry mood at the start of the year
News General news
While the business climate in the German print and media industry brightened at the end of last year, it clouded over visibly in January due to corona. The business climate index calculated by the Bundesverband Druck und Medien fell sharply by a seasonally adjusted 7.8 percent from 96.3 to 88.8 points compared with the previous month. Compared with the previous year, the decline thus increased to -9.7 percent. However, the index is still above the Corona low of April 2020.
In January, the print and media companies surveyed by the ifo Institute rated both their current business situation and their expectations regarding their business development over the next six months visibly worse than in December of last year.
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.
Following two recent increases in succession, the seasonally adjusted business situation index declined by 7.9 percent compared with December, falling back to the level of October 2020 (80.5 points). As a result of this decline, the index now stands 17.9 percent below its year-earlier level. The corona-induced weak order situation is obviously taking its toll on companies. The lack of orders is by far the most frequently cited reason (66 percent) for the production bottlenecks currently occurring in the companies. It is therefore hardly surprising that the current capacity utilization of companies is on average 75.8 percent and thus 8.4 percentage points below the previous year's value.
Similarly pessimistic as the assessment of the current business situation was the evaluation of the future business development on the part of the printing and media companies. After the corresponding seasonally adjusted index of business expectations had risen by around 9 percent in December compared with the previous month, it fell by 7.6 percent in January to 97.9 points, 0.7 percent below the previous year's level. Thus, the high volatility of the index, which mainly reflects corona-related business uncertainties, remains at the start of the new year. Against the backdrop of increased incidences of corona virus mutations, only slow progress in vaccination and the resulting relaxation of infection control measures, around 32 of those surveyed currently indicate that their business situation will develop rather unfavorably in the coming months. Around 52 percent do not expect any change in their business situation.
