Sentiment among German companies has brightened somewhat. The ifo Business Climate Index rose to 85.5 points in February, up from 85.2 points in January. This is due to slightly less pessimistic expectations. Assessments of the current situation remained unchanged – positive and negative responses here were nearly in balance. The German economy is stabilising at a low level.
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In manufacturing, the business climate index fell. Assessments of the current situation have not been so low since September 2020. Expectations are virtually as pessimistic as they were the previous month. The decline in the order backlog continues unabated. Companies have announced further cuts to production.
In the service sector, the business climate improved. Service providers were more satisfied with their current business situation. Expectations were still pessimistic, but somewhat less so than they were in January. Development of the order situation, however, is weak.
In trade, the index dropped again. Companies were noticeably less satisfied with their current business situation, although their expectations improved slightly. They are still deeply skeptical of how business will develop in the months ahead.
In construction, the business climate indicator rose slightly, although it remains at a low level. The increase is due to somewhat better assessments of the current situation. Expectations, however, declined to their lowest level since 1991.
More information:
ifo Institute
www.ifo.de