Sharp Rise in German Business Climate Index

The Ifo Business Climate Index for German industry and trade rose significantly by over three points in February. This represents its greatest increase since July 2010. Satisfaction with the current business situation continued to grow. Survey participants also expressed greater optimism about their future business perspectives. The German economy is regaining momentum.

In manufacturing the business climate indicator rose sharply. This was specifically due to a considerably more optimistic business outlook. Manufacturers also expressed greater satisfaction with their current business situation. Export expectations increased and are now above their long-term average once again.
In wholesaling the business climate also improved clearly after deteriorating last month. Wholesalers are more satisfied with their current business situation and less pessimistic about future business developments. In retailing, on the other hand, the business climate remained unchanged. Assessments of the current business situation were more positive than last month, but retailers were slightly more sceptical about their future business developments.
In construction the business climate index continued to rise sharply, primarily due to a far more optimistic business outlook. The business outlook reached its highest level since German reunification. Satisfaction with the current business situation also continued to grow.
Hans-Werner Sinn
President of the Ifo Institute

Press Release with details click here.

"The fact that the German economy suffered a setback towards the end of 2012. As the Federal Statistical Office (Destatis) already reported in its first release of 14 February 2013, the gross domestic product (GDP) decreased by 0.6% - upon price, seasonal and calendar adjustment - in the fourth quarter of 2012 compared with the previous quarter. The result for the entire year of 2012 remained unchanged at +0.7% (calendar-adjusted: +0.9%)." (Source: Destatis Press release)

Despite this setback all indicators point to a strong recovery of the German Economy as stated by the German Chamber of Commerce and other sources. The property market has seen price increases on all fronts including rent.

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Sharp Rise in German Business Climate Index