Ifo's latest business survey found no improvement in sentiment in April. At 106.6, the overall confidence measure was a tick short of its March outturn and slightly weaker than the market consensus.
The essentially stable headline outcome masked a modest deterioration in current conditions and a gentle improvement in expectations. The former sub-index dipped 0.6 points to 113.2, its first decline since January but still its second highest print since last November. By contrast, expectations rose 0.4 points to 100.4, their second successive increase but still well short of the levels seen over most of 2015.
Morale was up 1.1 points at 6.5, a 3-month high, in manufacturing and gained 0.7 points to 0.2 in construction. However, wholesale saw a near-3 point fall to 10.6, its weakest reading since June 2015, and retail a 4.1 point reversal to 6.7, although this was still more than 2 points above its February mark. The service sector survey revealed a 3.7 point rise to 27.8, its strongest level since the start of the year.
Overall the Ifo results paint much the same picture as the flash PMIs released last week which similarly showed little real change in German economic trends. Both surveys pointed to some pick-up in manufacturing activity but, in the aggregate, broadly steady underlying momentum.
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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