| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Business Climate | 87.0 | 86.0 to 87.9 | 86.7 | 85.2 | 85.3 |
| Current Conditions | 85.2 | 84.9 to 85.5 | 85.7 | 85.0 | 85.0 |
| Business Expectations | 86.8 | 86.4 to 90.5 | 87.7 | 85.4 | 85.6 |
Highlights
Sentiment in Germany's business sector shows some improvement, as reflected in the business climate index, up at 86.7 points in March. While companies viewed current conditions slightly more favourably (85.7 vs. 85.0 prior revised), expectations improved more significantly (87.7 vs. 85.6 prior revised), signalling a tentative optimism.
Regarding sectoral trends, manufacturing saw a better outlook with improvement in both current sentiment and future expectations compared to February. Services also improved, with architectural and engineering firms displaying the most significant optimism. Trade showed improvement once again, as both wholesale and retail traders expressed a more positive economic view. Construction also improved, however, a lack of orders still led to strong scepticism in future expectations.
The German economy is showing signs of recovery with all sectors improvement. Despite current challenges, future expectations remain mostly positive. The latest update takes the German RPI to minus 11 and the RPI-P to minus 6. This suggests that the real economy is within market expectations.
Regarding sectoral trends, manufacturing saw a better outlook with improvement in both current sentiment and future expectations compared to February. Services also improved, with architectural and engineering firms displaying the most significant optimism. Trade showed improvement once again, as both wholesale and retail traders expressed a more positive economic view. Construction also improved, however, a lack of orders still led to strong scepticism in future expectations.
The German economy is showing signs of recovery with all sectors improvement. Despite current challenges, future expectations remain mostly positive. The latest update takes the German RPI to minus 11 and the RPI-P to minus 6. This suggests that the real economy is within market expectations.
Market Consensus Before Announcement
Things are looking up in Germany with movement toward more government spending on infrastructure and defense. Business climate is expected up at 87.0 versus 85.2 in the prior month. Current conditions is seen at 85.2 versus 85.0 and expectations at 86.8 versus 85.4.
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.
