Tuesday, 26 February 2008

Ifo Business Climate Brightens Somewhat

The Ifo Business Climate Index for industry and trade in Germany has risen slightly in February. The companies have assessed their current situation even more positively than in January. The outlook for the coming six months has worsened somewhat, however. On the whole, the economic situation of German industry and trade is robust, but the expectations continue to point to a cyclical weakening.

In manufacturing the business climate indicator has fallen marginally. The firms have assessed their current situation somewhat more favourably than in January. With regard to the six-month outlook, however, they are less confident. Also their optimism regarding exports has weakened. But their hiring plans point to a further increase in staff levels in the coming months.

In the construction industry the business climate has clearly worsened. The firms have assessed their current business situation more unfavourably than in January and are also less confident regarding the six-month business outlook. In wholesaling the climate indicator rose slightly. Current business has again been assessed somewhat more positively, but the surveyed firms are less confident regarding future business. In retailing the index has risen clearly, however, with firms assessing their current situation considerably more favourably than in January. The six-month outlook has also improved.

Hans-Werner Sinn
President, Ifo Institute for Economic Research

Download the press release of 26 February 2008 as PDF-file

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