The ifo Business Climate Index in May stayed at 89.3 points. Companies were less satisfied with their current business situation, but expectations brightened. The manufacturing, trade, and construction sectors are recovering, although the service sector took a slight hit. Germany's economy is working its way out of the crisis step by step.
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In manufacturing, the business climate improved for the third time in a row. Companies were considerably more satisfied with their current business. In addition, the outlook for the coming months was less pessimistic than in the previous month. The order backlog continued to decline, however.
In the service sector, the index declined. This was due to somewhat worse assessments of the current business situation. However, expectations improved a bit. Companies reported additional orders.
In trade, the index took a significant step upward. Business expectations improved considerably, though they are still marked by scepticism. The current situation is looking up as well, a trend driven primarily by the wholesale segment.
In construction, the index improved once again. Companies were more satisfied with their current business situation, and their expectations were also somewhat less pessimistic. A lack of orders, however, remains a core problem.
Sentiment in the German export industry has turned brighter. The ifo Export Expectations rose from -1.5 in April to +0.3 points in May. 'Positive and negative responses are in nearly perfect balance,' says Klaus Wohlrabe, Head of Surveys at ifo. 'The export economy is not yet developing any great momentum overall.'
More information:
ifo Institute
www.ifo.de