Business confidence in the German wholesale sector, dealing in raw materials, intermediate products, machinery and equipment, saw a slight improvement in June. The index measured by the Munich-based Ifo Institute rose from -20.5 points in May to -16.7.
Ulrike Mandalka, Ifo industry expert, attributed part of this improvement to the construction-related wholesale segment, noting that the German government’s newly established infrastructure fund is fostering hope for renewed momentum. Businesses are also anticipating increased demand from industrial customers, driven by planned accelerated depreciation, tax reductions and lower network charges.
Within the production-related wholesale sector – a crucial link between manufacturers and customers in the processing industry, crafts and construction – both the assessment of the current situation and future expectations saw a modest increase, rising from -17.7 to -15.1 and from -23.3 to -18.3 respectively. However, despite this positive shift, overall business sentiment remains cautious. This caution is reflected in ongoing plans for workforce reductions, although the pace of these reductions has eased slightly compared to May.
A similar pattern is visible within the consumer goods wholesale sector, where business confidence also improved from -13.5 to -11.1. Assessments of the current situation and expectations also rose to -12.8 (from -13.7 in May) and -9.5 (from -13.4) respectively. According to Mandalka, the slight uptick reflects increased consumer spending, offering a glimmer of hope for businesses. However, this trend has not yet translated into changes in staffing levels and retailers are anticipating further reductions in employment.