FRANKFURT (MNI) – Credit conditions in German industry and trade
tightened marginally in March, according to the Ifo Institute’s monthly
survey. It was the index’s first rise since December 2009.
“The credit constraints for German industry and trade remain low in
March and are largely unchanged,” Ifo wrote. Its “credit hurdle” index
for March, which measures the percentage of companies that report credit
access as restrictive, is 23.7%, an “imperceptible” 0.1 percentage point
above February’s level.
The current level of the credit hurdle remains quite low in
historical terms. “Germany is currently experiencing a strong investment
boom, which is being financed by favourable bank loans,” Ifo said.
The indicator in manufacturing moved in different directions based
on company size. For large manufacturing firms, the hurdle rose by 0.3
point to 22.6%; the hurdle rose also for small manufacturers by 2.3
points to 24.5%. Middle-sized firms, however, reported less restrictive
access to credit, with the hurdle falling by 0.6 point to 21.0%.
In wholesaling and retailing, the credit constraint fell an
additional 0.6 point to 21.6%, whereas in construction it rose 0.8 point
to 32.4%.
While there has been concern in the past that a credit crunch would
cramp machine-tool producers, a key player in industry, such worries
have not materialized, the head of the Engineering Federation, Thomas
Lindner, told MNI in an interview last week.
Still, he warned that over time, more restrictive capital rules
from Basel III and restructuring of Germany’s banking sector could make
credit more expensive.
“I don’t think we are looking at an extreme credit squeeze, but I
could imagine that the costs of classical industry credit will rise,”
Lindner said, adding that this could force businesses to seek credit
from sources other than banks.
–Frankfurt bureau, +49-69-720142, frankfurt@marketnews.com
[TOPICS: M$G$$$,M$X$$$,M$XDS$,MAGDS$]
