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Sentiment in German printing and media industry improving

A pile of newspapers
A pile of newspapers
09 Jun 2020 − 

After the business environment in the German printing and media industry slumped to a 10-year low in April due to the coronavirus pandemic, businesses are now seeing signs of a recovery, according to the Bvdm business telegram.

After the business environment in the German printing and media industry slumped to a 10-year low in April due to the coronavirus pandemic, the index regained some ground in May, according to the Bvdm business telegram. Hopes that the economy would soon return to normal have led to significantly more optimistic expectations compared to the previous month. In May, the business climate index of the printing and media industry increased by 3.5 per cent month on month to stand at 84.1. Compared to 2019, however, the index was down by 13.6 points.

However, the printing and media companies surveyed by Ifo Institute in May assessed their current business situation as considerably weaker than in April. The business situation index declined once again in May by a seasonally adjusted 6.5 per cent versus the previous month.

At 75.7, the index was 23 per cent below the prior-year level. This is the steepest year-on-year drop measured since the beginning of the time series in January 1991. This means that the first steps taken to ease the coronavirus lockdown in May barely had any impact on the poor demand and ordering trends. Around 62 per cent of the companies surveyed said that their current order backlog was too small. Only around 1 per cent of the respondents described their order backlogs as relatively large. This figure represents a net deterioration of around 24 percentage points compared to April 2019. Accordingly, it comes as no surprise that 53 per cent of those surveyed rated their current earnings situation as poor, whereas just 10 per cent reported a good earnings situation.

The slight recovery in the business environment as compared with the previous month is primarily due to the significantly more optimistic expectations of printing and media companies with regard to their future business situation. It appears that the improvement in the business expectation index was driven in large part by growing hopes for an imminent economic recovery after the lifting of some lockdown measures.

Compared with April, the index rose by a seasonally adjusted 14.6 per cent to 93.6, down by just 3.7 per cent from the prior-year level.

Around 24 per cent of those surveyed expected a more favourable business development in the coming six months. Approximately 42 per cent of the companies surveyed believe their future business situation is likely to worsen. Compared to one year earlier, the net figure was thus down by around 7 percentage points.

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