GERMAN BUSINESS CLIMATE WORSENS SLIGHTLY - INSTITUTE
The business climate in West German
manufacturing industry worsened slightly last month after
deteriorating markedly in January, the IFO economic research
institute said.
    It said its February survey showed firms were also
increasingly pessimistic about the outlook for the coming
months, causing them to cut back production plans.
    IFO blamed the worsening of the business climate and
outlook largely on expectations of further declines in foreign
demand.
    More than a quarter of the firms polled said they thought
orders in hand were insufficient.
    Overall, the business climate in February could be
described as just short of satisfactory, IFO said.
    In a breakdown of responses by industrial sector, the
institute said manufacturers of basic products judged the
business climate to be slightly less favourable in February
than in January. For the coming months they expect export
prospects to dim and production to fall, it added.
    Chemical firms reported a slight improvement in demand but
they increasingly said orders on hand were insufficient.
    The business climate in the capital goods industry was
unchanged in February compared with January, but IFO said this
was due entirely to positive reports from makers of commercial
vehicles.
    Demand in the capital goods sector was generally described
as weak, with the outlook in February cloudier than it had been
in January, the institute said.
    The business climate in the consumer durables sector
remained above the industry average in February. Carmakers were
again positive about current business but forecast a slight
worsening of business conditions in the near future.
    In the consumer goods industry business conditions were
described as favourable in February.
    A small cutback in production meant orders on hand in this
sector rose compared with January, the institute said.
 REUTER
