| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Business Climate | 89.0 | 89.4 | 87.8 | 87.9 |
| Current Conditions | 89.0 | 88.9 | 88.1 | |
| Business Expectations | 88.9 | 89.9 | 87.5 | 87.7 |
Highlights
Ifo's April survey found business sentiment again improving rather more quickly than expected. At 89.4, the overall climate indicator was up a further 1.5 points on the month and 0.4 points stronger than the market consensus. This was its third straight gain and its highest mark since May 2023.
Current conditions advanced a smaller 0.8 points to 88.9, their second consecutive increase and a 5-month peak. This left expectations to lead the way again with a solid 2.2 point jump that lifted their cumulative increase since January to 6.5 points. At 89.9, the sub-index saw its best post since April last year.
Promisingly, sentiment in all of the main sectors improved further. Hence, manufacturing was up 1.4 points at minus 8.5, trade 0.9 points at minus 22.0, services 2.8 points at 3.2 and construction 4.7 points at minus 28.5.
Today's unexpectedly upbeat results are consistent with yesterday's flash PMI survey which similarly signalled a surprisingly sharp improvement in activity rates this month. Neither report indicates a strong period for growth but it does seem likely that the economy started the current quarter with some much-needed momentum. Indeed, the April update lifts the German RPI to 28 and the RPI-P to 32, both measures showing economic activity in general running quite well ahead of market forecasts.
Current conditions advanced a smaller 0.8 points to 88.9, their second consecutive increase and a 5-month peak. This left expectations to lead the way again with a solid 2.2 point jump that lifted their cumulative increase since January to 6.5 points. At 89.9, the sub-index saw its best post since April last year.
Promisingly, sentiment in all of the main sectors improved further. Hence, manufacturing was up 1.4 points at minus 8.5, trade 0.9 points at minus 22.0, services 2.8 points at 3.2 and construction 4.7 points at minus 28.5.
Today's unexpectedly upbeat results are consistent with yesterday's flash PMI survey which similarly signalled a surprisingly sharp improvement in activity rates this month. Neither report indicates a strong period for growth but it does seem likely that the economy started the current quarter with some much-needed momentum. Indeed, the April update lifts the German RPI to 28 and the RPI-P to 32, both measures showing economic activity in general running quite well ahead of market forecasts.
Market Consensus Before Announcement
March's business climate of 87.8 was well beyond the consensus and up solidly from 85.5 in February. April's consensus is a further gain to 89.0.
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.
