| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Business Climate | 85.8 | 84.7 to 86.5 | 85.2 | 85.1 | 85.2 |
| Current Conditions | 86.3 | 86.2 to 86.4 | 85.0 | 86.1 | 86.0 |
| Business Expectations | 85.0 | 83.5 to 85.4 | 85.4 | 84.2 | 84.3 |
Highlights
Sentiment in Germany's business sector remains cautious, as reflected in the business climate index, which held steady at 85.2 points in February. While companies viewed current conditions slightly less favourably (85.0 vs. 86.0 prior revised), expectations improved (85.4 vs. 84.3 prior revised), signalling a tentative optimism.
Regarding sectoral trends, manufacturing saw a better outlook despite a weaker assessment of the current business. Stabilising order books suggests resilience. Services declined, with transport and logistics firms displaying more significant scepticism. Both current sentiment and future expectations deteriorated. Trade showed improvement, as both wholesale and retail traders expressed a more positive economic view. Construction remained strained, with a lack of orders weighing on current business. However, slightly improved expectations indicate some relief ahead.
While the German economy is not yet out of uncertainty, the divergence across sectors suggests a fragile but evolving landscape. The overall wait-and-see approach highlights businesses' cautious optimism amid prevailing challenges. The latest update takes the German RPI to 0 and the RPI-P to 10. This means that economic activities are within market expectations of the UK economy.
Regarding sectoral trends, manufacturing saw a better outlook despite a weaker assessment of the current business. Stabilising order books suggests resilience. Services declined, with transport and logistics firms displaying more significant scepticism. Both current sentiment and future expectations deteriorated. Trade showed improvement, as both wholesale and retail traders expressed a more positive economic view. Construction remained strained, with a lack of orders weighing on current business. However, slightly improved expectations indicate some relief ahead.
While the German economy is not yet out of uncertainty, the divergence across sectors suggests a fragile but evolving landscape. The overall wait-and-see approach highlights businesses' cautious optimism amid prevailing challenges. The latest update takes the German RPI to 0 and the RPI-P to 10. This means that economic activities are within market expectations of the UK economy.
Market Consensus Before Announcement
Business climate is expected up marginally at 85.8 versus 85.1 in the prior month. Current conditions is seen at 86.3 versus 86.1 and expectations at 85.0 versus 84.2.
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.
