| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Business Climate | 88.3 | 88.0 to 88.7 | 88.1 | 88.4 |
| Current Conditions | 85.4 | 84.9 to 85.5 | 85.6 | 85.3 |
| Business Expectations | 91.3 | 91.0 to 92.0 | 90.6 | 91.6 |
Highlights
Germany's economic sentiment weakened further in November as the business climate index slipped to 88.1, 0.2 points below the consensus and reflecting growing pessimism among firms despite a marginal improvement in assessments of current conditions.
The manufacturing sector remained under strain, with shrinking order books and sharp declines in expectations signalling continued uncertainty. Services offered a mixed picture, although current activity improved, caution persisted, particularly in transport and logistics, contrasting with renewed optimism in tourism. Trade faced a difficult month, with retailers reporting disappointment at the onset of the Christmas season as both current assessments and expectations fell. Construction displayed a paradoxical pattern as firms reported better current conditions, yet their future outlooks deteriorated due to persistently weak demand.
Overall, the latest data suggest that German businesses are experiencing an uneven climate, where widespread concerns about recovery overshadow isolated pockets of resilience. The divergence between improved present conditions and declining expectations indicates that firms remain wary of structural headwinds affecting demand, investment, and sectoral stability. These latest updates take the RPI to minus 28 and the RPI-P to minus 34, indicating that economic activity continues to lag expectations for the German economy.
The manufacturing sector remained under strain, with shrinking order books and sharp declines in expectations signalling continued uncertainty. Services offered a mixed picture, although current activity improved, caution persisted, particularly in transport and logistics, contrasting with renewed optimism in tourism. Trade faced a difficult month, with retailers reporting disappointment at the onset of the Christmas season as both current assessments and expectations fell. Construction displayed a paradoxical pattern as firms reported better current conditions, yet their future outlooks deteriorated due to persistently weak demand.
Overall, the latest data suggest that German businesses are experiencing an uneven climate, where widespread concerns about recovery overshadow isolated pockets of resilience. The divergence between improved present conditions and declining expectations indicates that firms remain wary of structural headwinds affecting demand, investment, and sectoral stability. These latest updates take the RPI to minus 28 and the RPI-P to minus 34, indicating that economic activity continues to lag expectations for the German economy.
Market Consensus Before Announcement
Business climate expected almost unchanged at 88.3 versus 88.4 in the prior month. Current conditions seen at 85.4 versus 85.3 and expectations at 91.3 versus 91.6.
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.
