DE: Ifo Survey

Mon Sep 25 03:00:00 CDT 2017

Consensus Actual Previous Revised
Economic Sentiment 116.0 115.2 115.9 115.7
Current Conditions 124.7 123.6 124.6 124.7
Bus. Expectations 107.7 107.4 107.9 107.8

September's Ifo survey was on the soft side of market expectations. At 115.2, the overall sentiment index was 0.5 points short of its downwardly revised August reading and matched its lowest mark since May. That said, the third quarter average (115.7) was still 1.4 points above the second quarter mean.

The headline drop reflected modest falls in both components. Current conditions declined more than a full point to 123.6, their second consecutive decrease, but were still some 9 points above their level a year ago. Expectations slipped just 0.4 points to 107.4 and so unwound most of August's 0.5 point gain. They stand nearly 3 points higher than in September 2016.

Today's survey results are rather less upbeat than the flash PMIs released last week but both reports suggest that the German economy enjoyed a buoyant third quarter.

Published by Munich's Ifo Institute, the Business Climate Index is closely watched as an early indicator of morale in German industry. In addition to overall gauge of sentiment, data are provided on its two components, current conditions and expectations. As a forward looking indicator, the latter is normally seen as the more important. Ifo surveys more than 7,000 enterprises in manufacturing, construction, wholesaling and retailing and a separate estimate of sector confidence is supplied for each.

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.