Germany's Ifo Survey showed steady conditions but somewhat weaker business expectations in June. The survey's current conditions index was unchanged at 88.3, while the business expectations index fell from 90.4 in April to 89.0 in May. The business climate index fell from 89.3 to 88.6 but remains well above levels seen early in the year and late 2023.

On a sectoral basis, the manufacturing balance improved from minus 8.6 to minus 6.2, with the trade and construction sectors also recording smaller negative balances. The balance for the services sectors however, weekend from plus 3.2 to plus 1.8.

The business climate index fell short of the consensus forecast of 89.4. Germany's RP1 fell from minus 21 to minus 32 and its RPI-P fell from minus 32 to minus 47, indicating that German data are coming in further below consensus expectations.

The business climate index held unchanged in May at 89.3 which was 1 point below the consensus but still matching its best reading since May last year. June's consensus is a steady 89.4.

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.

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.