The German Ifo Business Climate Index for Industry and Trade 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.
The Ifo Business Climate Index is based
on ca. 7,000 monthly survey responses of firms in manufacturing, construction,
wholesaling and retailing. The firms are asked to give their assessments of the
current business situation and their expectations for the next six months. They
can characterise their situation as “good”, “satisfactorily” or “poor”
and their business expectations for the next six months as “more favourable”,
“unchanged” or “more unfavourable”.
The balance value of the current business
situation is the difference of the percentages of the responses
“good” and “poor”; the balance value of the expectations is the
difference of the percentages of the responses “more favourable” and
“more unfavourable”. The business climate is a transformed mean of the
balances of the business situation and the expectations. For calculating the
index values the transformed balances are all normalised to the average of the
year 2000.
Ifo Business Climate for the Service
Sector Remains Stable
The Ifo Business Climate indicator for the German service sector
remains unchanged in February.
Although the current business situation has again been assessed
somewhat less positively than in January, optimism regarding the six-month
business outlook increased again. The responses indicate that the increase in
employment will continue in the months ahead.
