German printing, media industry rebounds from April slump with business climate index rising by a seasonally adjusted 4.5% in May; fluctuating energy prices, higher costs of goods, material shortages continue to impact company business expectations

In May, the print and media companies surveyed by the Ifo Institute assessed both their current business situation and their expectations for business development over the next six months as better than in the previous month. The values ​​for the business climate also increased. The values ​​of the current and expected business situation determine the development of the business climate, which represents a good preliminary indicator for the production development in the print and media industry.

After the seasonally adjusted business situation index stagnated in April, the index rose in May with a gain of 1.2 percent month-on-month. The index was listed at 103.3 points, the seasonally adjusted highest level of 2022 to date. The proportion of companies that are satisfied with the current business situation fell by 3.7 percentage points compared to the previous year. At the same time, however, the proportion of those who were dissatisfied fell by 26.8 percentage points.

Around 75 percent of all those surveyed thus confirmed that the business situation had remained the same in May. Although the index is 13 percent higher than the previous year's level, it must be taken into account that around 26.8 percent of companies rate their order backlog as "too small" and 23 percent rate their current earnings situation as weak.

The immediate imponderables of the Ukraine war have now given way to a certain degree of predictability. The acute absence of some worst-case scenarios, such as the occurrence of a gas shortage, led to an improvement in business expectations. The Business Sentiment Index rose 7.9 percent in May, recovering much of April's decline. At 96.5 points, the seasonally adjusted index is still 11.3 percent below the previous year's level. Around 29 percent of those surveyed in the printing and media industry expect the business situation to deteriorate in the next six months. Only around 13.5 percent expect the situation to improve. The seasonally adjusted balance rose by around 13 percentage points in May, but is still -14 percentage points. Compared to the previous year, this is a drop of around 24 percentage points. Corporate expectations continue to be determined by material shortages and high energy and paper prices. Many companies see the ongoing risk of production losses due to aggravated delivery bottlenecks and additional cost burdens due to high prices for intermediate goods. In addition, although the price increases for printed products could be implemented proportionately, this can lead to a reduction in order volume or a churn of orders in the long term. through an aggravation of delivery bottlenecks and additional cost burdens due to high prices for intermediate goods. In addition, although the price increases for printed products could be implemented proportionately, this can lead to a reduction in order volume or a churn of orders in the long term. through an aggravation of delivery bottlenecks and additional cost burdens due to high prices for intermediate goods. In addition, although the price increases for printed products could be implemented proportionately, this can lead to a reduction in order volume or a churn of orders in the long term.

Background information on the bvdm economic telegram and information on taking part in the monthly ifo business surveys can be found at: bvdm-online.de/kt