Wednesday, 26 March 2008

German Business Climate Again Brighter Than Previous Month

Ifo Business Climate Germany

Ifo Business Survey March 2008
Results of the March 2008 Ifo Business Survey

Ifo Business Climate Again Somewhat Brighter

The Ifo Business Climate Index for industry and trade in Germany has risen slightly in March. The companies have again assessed their current situation more positively than in the previous month. The outlook for the coming six months has also brightened somewhat. These results indicate that with the beginning of the year the German economy has gained strength.

In manufacturing the business climate indicator has risen somewhat. The firms have assessed their current situation clearly more favourably than in February. Confidence with regard to the six-month business outlook has weakened only marginally. Despite the strong euro the firms are more optimistic regarding exports than they were in February. Their hiring plans indicate that the increase in staff levels will continue in the coming months.

In the construction industry the business climate indicator has risen. The dissatisfaction with the current business situation has weakened somewhat, and also with regard to the six-month outlook more confidence has been expressed than in February. In wholesaling the business climate has also improved. Current business has again been assessed more positively, and the outlook is also somewhat brighter. The climate indicator in retailing has fallen slightly following the strong rise in February. This is mainly the result of a worsening of the current business situation, whereas the six-month outlook has been assessed only slightly less optimistically.

Hans-Werner Sinn
President of the Ifo Institute for Economic Research at the University of Munich

The business climate supports the positive development in the German property market and is reflected in the rent increase already experienced in the Berlin property market. It adds attraction to the current offers of investment apartments because improvements on the rent level are viable.

Uwe Falkenberg

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