| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Business Climate | 94.0 | 93.6 | 93.3 | 93.2 |
| Current Conditions | 96.1 | 95.0 | 95.4 | |
| Business Expectations | 91.6 | 92.2 | 91.2 | 91.0 |
Highlights
Ifo's April survey found another, albeit only minor, improvement in overall business sentiment. A 0.4 point gain versus March's downwardly revised 93.2 put the headline index at 93.6, its strongest reading since just before the Russian invasion of Ukraine in February last year. However, while this was the sixth successive rise, it was also the smallest of the sequence and slightly short of the market consensus.
Current conditions actually fell 0.4 points to 95.0, their second drop in the last three months although still their second highest level since last August. By contrast, expectations increased 1.2 points to 92.2, also their sixth straight gain and their best reading since February 2022. At a sector level, sentiment was mixed with falls in services (6.8 after 8.8) and trade (minus 10.7 after 10.1) contrasting with gains in manufacturing (6.7 after 6.5) and construction (minus 16.7 after minus 17.5).
Today's results leave the headline sentiment index a little short of its 96.7 long-run average but still suggest that the economy began the current quarter on a moderately firm footing. They also put the German ECDI at 2, indicating that overall economic activity is performing much as expected, although at 13, the ECDI-P points to a limited degree of outperformance by the real side.
Current conditions actually fell 0.4 points to 95.0, their second drop in the last three months although still their second highest level since last August. By contrast, expectations increased 1.2 points to 92.2, also their sixth straight gain and their best reading since February 2022. At a sector level, sentiment was mixed with falls in services (6.8 after 8.8) and trade (minus 10.7 after 10.1) contrasting with gains in manufacturing (6.7 after 6.5) and construction (minus 16.7 after minus 17.5).
Today's results leave the headline sentiment index a little short of its 96.7 long-run average but still suggest that the economy began the current quarter on a moderately firm footing. They also put the German ECDI at 2, indicating that overall economic activity is performing much as expected, although at 13, the ECDI-P points to a limited degree of outperformance by the real side.
Market Consensus Before Announcement
After improving for five months in a row, the business climate index in April is expected to rise further to 94.0. Current conditions are seen up at 96.1 versus 95.4 with business expectations at 91.6 versus 91.2.
Definition
Ifo is an acronym from Information and Forschung (research). 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 9,000 enterprises in manufacturing, services, construction, wholesaling and retailing and a separate estimate of sector confidence is supplied for each.
Description
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.
