Wedoany.com Report-Nov 6,  The business climate in Germany's chemical industry improved significantly in October, though it was still in negative territory, as companies pin their hopes on the government's electricity price package, according to a survey on Tuesday.

The Ifo economic institute's indicator on the sector jumped to -3.1 points in October from a seasonally adjusted -13.0 points in September on the back of improved expectations.

The sub-indicator measuring business expectations rose to 4.7 points in October from -15.9 points the month prior.

With the extended and expanded package, the German government wants to ensure competitive electricity prices for companies in the long term, including the abolition of a green power surcharge and further measures to reduce grid fees.

"These policy measures have been positively received by the chemical industry," said Ifo. In October, companies therefore assessed their competitiveness less negatively than recently.

However, that mood was tempered by ongoing weakness in manufacturing, where demand for chemical products remained subdued in October and the order backlog fell once again.

Against this backdrop, financing bottlenecks increased, further hampering willingness to invest in the sector.

"It is right to ease the burden on chemical companies now in order to maintain production capacities in Germany throughout the economic crisis," said Ifo industry analyst Anna Wolf.