February's Ifo survey was slightly less upbeat than generally anticipated. The headline business climate indicator rose a minimal 0.1 points versus its January reading to 106.8, its strongest level since the middle of 2014 but still well below that year's high (111.0).
The stability of overall sentiment masked divergent trends in its two components. Hence, while the current conditions sub-index slipped 0.4 points to 111.3, its second consecutive decline, the expectations gauge gained 0.5 points to 102.5, its fourth modest increase in as many months and its highest value since July last year.
Confidence was essentially unchanged on the month in all of the major output sectors although services (22.7 after 24.6) saw some softening.
Today's results paint a rather more cautious picture of economic activity than either the ZEW or PMI surveys but all are in keeping with another quarter of, at least, moderate GDP growth.
Published by the Ifo Institute, the Business Climate Index is closely watched as an early indicator of current conditions and business expectations in the German economy. The Institute surveys more than 7,000 enterprises on their appraisals of the business situation and their short-term planning.
The headline index has a good correlation with developments in overall GDP and so has a major influence in shaping views on how the national economy is performing. The main focus is the expectations index. It is generally published during the last week of the month for the current month with more detailed information available about a week later.
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