German packaging industry: business climate index rises again

The German portal www.neue-verpackung.de published the Ifo-based business climate index for various sectors of the packaging industry for October 2020. In October, the index again slightly exceeded its long-term average. The companies were noticeably more satisfied with their current economic conditions. Expectations for the coming months have also improved. Since the study was completed prior to the announcement of the new isolation regime, it remains to be seen whether the current state can be maintained or whether there will be a decline again. The business climate has improved in all sectors of the industry with the exception of metal containers and packaging.

In the segment of paper and paperboard products, the business climate index rose markedly again in October. Companies were more satisfied with the current economic situation. Expectations have also been adjusted upward. One of the reasons is the significant growth in demand. The number of orders received has increased markedly. Accordingly, production also increased. The companies also expect production growth in the coming months. Accordingly, capacity utilization increased by more than three percentage points to 85.8%. However, export expectations are still low. At the moment, significant growth is not expected.

In the segment of plastic products, the business climate indicator has increased. Companies' assessments of the current situation have improved. The expectations indicator rose to its highest level in more than two years. This was due to a noticeable improvement in the demand situation. The order book has increased significantly. However, there is still some skepticism about the overall assessment of the current ordering situation. Due to the growing demand, production has been increased in many places. This should also continue in the coming months. After a low in the second quarter, capacity utilization rose significantly to 75.5%. However, this is still below the long-term average of 80.0%. The current surge in demand is mainly related to the domestic market. For the rest of the world, sales are expected to decline. Many companies are planning to raise prices in the coming months.

The business climate indicator for the glass container sector has improved significantly. This is due to both noticeably more positive assessments of the current situation and more optimistic expectations of companies. The demand situation has improved markedly. Stocks have been significantly reduced. The production indicators developed positively. However, production plans remain cautious. However, capacity utilization increased from 86.4% to 91.5%.

In the segment of wooden packaging, the business climate index stopped its downward trend. The current economic situation was assessed somewhat better in October. However, the corresponding figure is still below its historical average. The same is with the expectation index, which, however, rose somewhat more distinctly. Demand has recovered, but there is no reason for much joy yet. Accordingly, a little more orders were received. Stocks have decreased. Production did not fall as much as before. Further production cuts were announced only in isolated cases. Capacity utilization increased by ten percentage points to 82.0%. When it comes to exports, some companies see hope for the best on the horizon.

In the segment of metal containers, the business climate indicator is an exception in October. It has dropped markedly. The reason for this was much more pessimistic expectations. The assessments of the current situation have also been slightly revised downward. The pessimism is surprising, since in fact the demand trend was positive. The order book is also improving. However, many companies were generally unhappy with this. Production could be increased, but production plans are rather restrained. Capacity utilization has dropped and is now 76.3%, which is almost exactly the same as the historical average. Export expectations have grown significantly. As in previous months, selling prices remained virtually unchanged.

Source: https://article.unipack.ru/