| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Business Climate | 90.7 | 88.5 | 91.7 | 91.5 |
| Current Conditions | 93.5 | 93.7 | 94.8 | |
| Business Expectations | 88.4 | 83.6 | 88.6 | 88.3 |
Highlights
Ifo's June survey was again a good deal weaker than the market consensus as markedly more pessimistic business expectations were compounded by a smaller decline in current conditions. Overall business sentiment fell 3.0 points from a weaker revised May level to 88.5, the second decline since last October and the lowest reading since November.
Current conditions were down 1.1 points at 93.7, their fourth fall in the last five months and their weakest outturn since November. Expectations plunged for the second month in a row, falling 4.7 points to 83.6 after May's 3.6-point drop and posting the lowest level since January.
At a sector level, sentiment deteriorated across the board, notably in manufacturing (minus 9.9 after minus 0.6) and services (2.7 after 6.8). Trade (minus 20.2 after minus 19.1) and construction (minus 20.1 after 18.5) also lost ground.
Today's weaker than expected results are in line with last Friday's flash PMI report, and also put the German ECDI at minus 42 and the ECDI-P at minus 49. German economic activity in general is falling significantly short of market expectations.
Current conditions were down 1.1 points at 93.7, their fourth fall in the last five months and their weakest outturn since November. Expectations plunged for the second month in a row, falling 4.7 points to 83.6 after May's 3.6-point drop and posting the lowest level since January.
At a sector level, sentiment deteriorated across the board, notably in manufacturing (minus 9.9 after minus 0.6) and services (2.7 after 6.8). Trade (minus 20.2 after minus 19.1) and construction (minus 20.1 after 18.5) also lost ground.
Today's weaker than expected results are in line with last Friday's flash PMI report, and also put the German ECDI at minus 42 and the ECDI-P at minus 49. German economic activity in general is falling significantly short of market expectations.
Market Consensus Before Announcement
The business climate index fell 1.7 points in May to 91.7, ending an extended run of improvement. Forecasters see a further 1.0 point decline in June to 90.7.
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.
