bvdm economic telegram October 2023 - Business climate declines again
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In October 2023, the seasonally and calendar-adjusted business climate in the German print and media industry fell again. While the business outlook for the next 6 months rose slightly, assessments of the current business situation slumped. Adjusted for seasonal and calendar effects, the business climate index calculated by the German Printing and Media Industries Federation fell by 2.8 percent compared to the previous month. At 86.4 points, the index was around 1.8% above the previous year's level, but reached a new low for the year. The business situation of companies continues to be burdened by persistently weak demand and below-average capacity utilization.
In October 2023, the decision-makers at printing and media companies surveyed by the ifo Institute assessed their current business situation as significantly worse than in the previous month. In contrast, they were slightly less pessimistic about developments in the coming months. Expectations regarding business development over the next 6 months increased. However, the slump in the business situation predominated in October and the business climate therefore fell significantly compared to the previous month. 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 significant decline in October and, at 82.1 points, was around 7.0% lower than in September. At around 12.2%, the index was therefore significantly below the previous year's level. Around 62% of the companies surveyed stated that they were affected by production restrictions in October. With a share of 53%, the lack of orders remained the biggest obstacle to production. The persistently low order situation was also reflected in the utilization of operating capacities. In October, the companies surveyed recorded an average capacity utilization rate of around 77.3%. This is around 2.6 percentage points lower than in the previous year. Assessments of the order backlog also remained clearly negative with a balance of -51.9 percentage points.
Print and media companies were slightly less pessimistic about their expected business development over the next six months than they were about their current situation. At a seasonally adjusted 90.9 points, the index was around 1.6% above the previous month's level. However, only a few companies (13%) still stated that they expected their business situation to improve significantly over the next six months. Around 43% of respondents expected their business situation to deteriorate over the next 6 months.
