| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Business Climate | 86.3 | 86.6 | 87.0 | |
| Current Conditions | 86.6 | 86.5 | 87.1 | |
| Business Expectations | 86.5 | 86.8 | 86.9 | 87.0 |
Highlights
Germany's Ifo business climate index fell slightly from 87.0 in July to 86.6 in August, leaving it below the prior five months' figures, indicating continued cautiousness among German businesses. The current conditions index slipped marginally to 86.5 from 87.1, slightly under consensus expectations. This suggests that German businesses are still grappling with a challenging economic environment.
Furthermore, there was a slight downtick in business expectations, which reached 86.8 from July's 86.9, surpassing the forecast. This could signal a slightly negative outlook among firms regarding future economic conditions. The downward results indicate that the overall economic mood remains wary.
Though changes were slight, the indices reflect ongoing uncertainty in the market. The downward revisions may suggest that businesses are wary of economic sentiments in the future, bringing down the RPI and RPI-P to minus 23 and minus 30. Finally, the overall levels still point to a fragile economic climate that requires careful monitoring by policymakers and business leaders to foster a more robust recovery.
Furthermore, there was a slight downtick in business expectations, which reached 86.8 from July's 86.9, surpassing the forecast. This could signal a slightly negative outlook among firms regarding future economic conditions. The downward results indicate that the overall economic mood remains wary.
Though changes were slight, the indices reflect ongoing uncertainty in the market. The downward revisions may suggest that businesses are wary of economic sentiments in the future, bringing down the RPI and RPI-P to minus 23 and minus 30. Finally, the overall levels still point to a fragile economic climate that requires careful monitoring by policymakers and business leaders to foster a more robust recovery.
Market Consensus Before Announcement
August's business climate is expected to fall further to 86.3 following July's 1.6-point fall to 87.0 that compared with expectations for improvement to 89.0. The business climate index has missed the consensus the last three reports in a row.
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.
