December 15, 2016

vbw Index of Business Activity in Bavaria – fall 2016

On November 17th, 2016, Alfred Gaffal, President of vbw, presented the latest vbw Index of Business Activity in Bavaria. The fall index is at 132 on a scale ranging from 0 to 200 points, which is only one point above the spring level.

Positive forecast

The vbw Index is divided into four sub-indices: Current economic growth has increased five points up to 141. The corresponding forecast index went up by four points and is now at 126. Only the current employment situation dropped by nine down to 128 points. The temporary decrease in unemployment and the creation of new jobs has come to an end. At the same time, the rise of the forecast indexfor employment indicates a further improvement of the labor market.

Altogether, the Bavarian economy is growing, the labor market is near full employment, business confidence is good and the prospects are positive as well. In 2016, vbw forecasts an economic growth of 2.5 percent for Bavaria. Next year, a slight decrease is expected, partly because 2017 will have three working days less due to public holidays. In addition, President Gaffal named reasons such as growing uncertainties due to Brexit, the outcome of the US presidential elections, the political development in Turkey, the war in Syria and the strained relationship between Russia and the western world.

Future success depends on continuous effort

At the moment, the Bavarian economy seems to be strong enough to deal with these uncertainties. But, as President Gaffal underlined, this must not draw off the attention to strive for competitiveness. He called upon the government to further strengthen the viability of the country. Essential policy fields are, amongst others, the German pension system and energy policy.


Volker Leinweber

Volkswirtschaftliche Grundsatzfragen

Volker Leinweber