Overview
- The ifo Institute's May survey recorded business expectations at minus 42.0, the weakest reading since October 2022, while assessments of the current situation improved slightly to minus 17.5.
- Companies say the April Iran war shock produced a temporary demand and price boost caused by precautionary buying, but ifo experts and industry leaders view that lift as short lived.
- Material shortages rose sharply, with 31.1 percent of firms reporting supply bottlenecks, and the price indicator jumped to plus 47.5, signaling rising input costs and inflationary pressure for producers.
- Despite the brief upturn, many firms are planning lower production and further job cuts, and export expectations have deteriorated, leaving the sector exposed to persistent energy and competition pressures.
- Regional alarm grew over Dow's announced closure of the Böhlen steamcracker by end-2027, which unions warn could break supply chains across the Mitteldeutsches Chemiedreieck and cost thousands of jobs unless the federal government acts.