ifo Business Climate Index for Germany

The ifo Business Climate Index is a highly-regarded early indicator of economic developments in Germany published on a monthly basis. Detailed results of the ifo Business Survey are published in the ifo Konjunkturperspektiven (in German).

Current Results

Illustration, News, ifo Business Climate, March 2024
Facts22 Mar 2024

Sentiment in German companies has improved noticeably. The ifo Business Climate Index rose to 87.8 points in March, up from 85.7 points in February. In particular, companies’ expectations turned much less pessimistic. Assessments of the current business situation also improved. The German economy glimpses light on the horizon.

Illustration, News, ifo Business Climate, February 2024
Facts23 Feb 2024

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 stabilizing at a low level.

Illustration, News, ifo Geschäftsklimaindex, Januar 2024
Facts25 Jan 2024

Sentiment among German companies has deteriorated further at the beginning of the year. The ifo Business Climate Index fell to 85.2 points in January, down from 86.3 points in December. Companies assessed their current situation as worse. Their expectations for the months ahead were also once again more pessimistic. The German economy is stuck in recession.

Upcoming Release Dates

Einen Termin in den Kalender eintragen

ifo Business Climate Index for Germany
24 Apr 2024 10:30
27 May 2024 10:30
24 Jun 2024 10:30
25 Jul 2024 10:30
26 Aug 2024 10:30
24 Sep 2024 10:30
25 Oct 2024 10:30
25 Nov 2024 10:30
17 Dec 2024 10:30

Information on the ifo Business Climate Index

  • ifo Business Climate for Germany
    • The ifo Business Climate Index is the most important leading indicator for the development of the economy in Germany. In April 2018, the new ifo Business Climate Germany will replace the previous ifo index for industry and trade. The most important change: In addition to the manufacturing sector, the construction industry, wholesaling and retailing, the service sector was integrated. In addition, the aggregation method has been slightly modified and the base year for the index calculation from 2005 to 2015 has also been adjusted.

      Publications

      Sauer, Stefan / Klaus Wohlrabe
      "Das neue ifo Geschäftsklima Deutschland"
      ifo Schnelldienst 71 (07), 2018, 54–60.

      Sauer, Stefan / Wohlrabe, Klaus
      "The New ifo Business Climate Index for Germany"
      CESifo Forum 19 (2), 2018, 59–64.

      Sauer, Stefan / Weber, Michael / Wohlrabe,Klaus
      "Das neue ifo Geschäftsklima Ostdeutschland und Sachsen: Hintergründe und Anpassungen"
      ifo Dresden berichtet 25 (03), 2018, 20–24.

  • Calculating the ifo Business Climate
    • How the ifo Business Climate is calculated with an example to illustrate how the balance values are calculated.

      The ifo Business Climate is a widely observed early indicator for economic development in Germany. It is based on ca. 9,000 monthly survey responses of firms in manufacturing, service sector, construction, wholesailing 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 replies are weighted according to the importance of the industry and aggregated. 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 mean of the balances of the business situation and the expectations.

      An example to illustrate how the balance values are calculated:

      Of 100 responding firms, 40% appraise their business situation as satisfactory, 35% as good and 25% as poor. The firms that assessed their situation as satisfactory are considered to be "neutral" and do not affect the results of the business-situation appraisal. The two remaining percentage values (35 - 25) are now balanced. The resulting value of 10 percentage points is the business-situation appraisal, i.e. the first component of the business climate in the form of a balance. The six-month expectations are calculated the same way. From the situation and expectations appraisal the mean is formed, which is the ifo Business Climate balance for the individual month:

      Calculating the Balance Values of the ifo Business Climate

      The ifo Business Climate balances can fluctuate between extreme values of -100 (i.e., all responding firms appraise their situation as poor or expect business to become worse) and +100 (i.e., all responding firms assessed their situation as good or expect an improvement in their business).

      For calculating the index values of the business climate and its components - situation and expectation - the balances are all increased by 200 and normalized to the average of a base year (currently 2015).

      Calculating the Index Values of the ifo Business Climate

       

  • Seasonal Adjustment
    • Seasonal Adjustment in the ifo Business Survey

      Seasonal adjustment procedures are methods of eliminating annually recurring patterns in time series. The seasonal adjustment is a fundamental component of the calculation of the results series of the ifo Business Survey. Therefore, the ifo Institute uses the internationally widespread X-13ARIMA-SEATS procedure developed by the U.S. Census Bureau. Thus ifo’s seasonal adjustment procedure is in line with international standards. InsteadFurthermore, variables that show significant working day effects are subject to an additional working day adjustment.

      The article by Stefan Sauer and Klaus Wohlrabe describes the basic concept of seasonal adjustment procedures, and goes on to describe the X-13ARIMA-SEATS method in greater detail. It focuses on various parameters such as season selection and the trend filter. These parameters can be individually selected for every time series and thus enable customized adjustments to the various conditions affecting individual time series. The article ends with an explanation of the characteristics of the time series and the advantages of the process.

      Sauer, Stefan / Wohlrabe, Klaus
      Die Saisonbereinigung im ifo Konjunkturtest – Umstellung auf das X-13ARIMA-SEATS-Verfahren
      ifo Schnelldienst 68 (01), 2015, 32–42.

      The article by Steffen R. Henzel investigates the influence of the switch to in the seasonal adjustment procedure from the ASA-II procedure to the X-13ARIMA-SEATS method on the forecasting accuracy of the ifo indicators.

      Henzel, Steffen R.
      Prognosekraft des ifo Konjunkturtests – Einfluss der neuen Saisonbereinigung mit X-13ARIMA-SEATS
      ifo Schnelldienst 68 (01), 2015, 59–63.

  • Publications on the Forecasting Quality
    • Publications on the forecasting quality of the ifo Business Climate Index

      The ifo Business Climate is a much considered indicator for the economic evolution in Germany. It is again and again the subject of scientific analyses in which the different qualities of the business climate are examined.

      Lehmann, Robert, "The Forecasting Power of the ifo Business Survey", CESifo Working Paper No. 8291.

      Wohlrabe, Klaus and Timo Wollmershäuser, "Über die richtige Interpretation des ifo Geschäftsklimas als konjunktureller Frühindikator", ifo Schnelldienst 70 (15), 2017, 42–46.

      Wohlrabe, Klaus and Timo Wollmershäuser, "Der Zusammenhang zwischen Geschäftserwartungen und -lage im ifo Konjunkturtest", ifo Schnelldienst 69 (05), 2016, 42–45.

      Litsche, Simon and Przemyslaw Wojciechowski, "Konjunkturtest im Fokus: Maschinenbau", ifo Schnelldienst 69 (05), 2016, 33–37.

      Wojciechowski, Przemyslaw, "Konjunkturtest im Fokus: Rekordwerte in der Konjunkturumfrage im Bereich Dienstleistungen: Was treibt den Geschäftsklimaindikator in die Höhe?", ifo Schnelldienst 68 (22), 2015, 41–43.

      Wojciechowski, Przemyslaw, "Konjunkturtest im Fokus: Information und Kommunikation", ifo Schnelldienst 68 (07), 2015, 57–60.

      Sauer, Stefan and Klaus Wohlrabe, "Die Saisonbereinigung im ifo Konjunkturtest – Umstellung auf das X-13ARIMA-SEATS-Verfahren", ifo Schnelldienst 68 (01), 2015, 32–42.

      Henzel, Steffen R., "Prognosekraft des ifo Konjunkturtests – Einfluss der neuen Saisonbereinigung mit X-13ARIMA-SEATS", ifo Schnelldienst 68 (01), 2015, 59–63.

      Nierhaus, Wolfgang and Klaus Abberger, "Zur Prognose von konjunkturellen Wendepunkten: Dreimal-Regel versus Markov-Switching ", ifo Schnelldienst 67 (16), 2014, 21–25.

      Henzel, Steffen and Klaus Wohlrabe, "Das ifo Beschäftigungsbarometer und der deutsche Arbeitsmarkt", ifo Schnelldienst 67 (15), 2014, 35–40.

      Kudymowa, Evgenia and Klaus Wohlrabe, "Konjunkturtest im Fokus: Herstellung von Gummi- und Kunststoffwaren", ifo Schnelldienst 67 (07), 2014, 23–26.

      Kudymowa, Evgenia and Klaus Wohlrabe, "Konjunkturtest im Fokus: Die Herstellung von Druckerzeugnissen; Vervielfältigung von bespielten Ton-, Bild- und Datenträgern", ifo Schnelldienst 67 (06), 2014, 31–35.

      Sauer, Stefan and Christian Seiler, "Konjunkturtest im Fokus: Die Beurteilung der Lagerbestände im Handelsgewerbe", ifo Schnelldienst 67 (04), 2014, 41–44.

      Henzel, Steffen and Sebastian Rast, "Prognoseeigenschaften von Indikatoren zur Vorhersage des Bruttoinlandsprodukts in Deutschland", ifo Schnelldienst 66 (17), 2013, 39–46.

      Abberger, Klaus, Manuel Birnbrich and Christian Seiler, "Der »Test des Tests« im Handel – eine Metaumfrage zum ifo Konjunkturtest", ifo Schnelldienst 62 (21), 2009, 34–41.

      Abberger, Klaus and Wolfgang Nierhaus, "Das ifo Geschäftsklima: Ein zuverlässiger Frühindikator", ifo Schnelldienst 60 (05), 2007, 25–30.

      Abberger, Klaus and Wolfgang Nierhaus, "Das ifo Geschäftsklima und Wendepunkte der deutschen Konjunktur", ifo Schnelldienst 60 (03), 2007, 26–31.

      Goldrian, Georg, Handbook of survey-based business cycle analysis, Ifo Economic Policy, 2, Elgar, Cheltenham, 2007, IX, 247.

      Abberger, Klaus and Klaus Wohlrabe, "Einige Prognoseeigenschaften des ifo Geschäftsklimas - Ein Überblick über die neuere wissenschaftliche Literatur", ifo Schnelldienst 59 (22), 2006, 19–26.

      Abberger, Klaus, "ifo Geschäftsklima und Produktionsindex im verarbeitenden Gewerbe", ifo Schnelldienst 59 (21), 2006, 42–45.

      Sinn, Hans-Werner and Klaus Abberger, "Zur Prognosekraft des ifo Indikators", ifo Schnelldienst 59 (04), 2006, 35–36.

      Goldrian, Georg, "Anmerkungen zu einer Untersuchung des prognostischen Gehalts von ifo Geschäfts- und ZEW-Konjunkturerwartungen", ifo Schnelldienst 54 (10), 2001, 33.

Cover ifo Konjunkturperspektiven
Publication series

ifo Konjunkturperspektiven is a monthly German-language online publication that presents the latest results from ifo’s business surveys in the form of graphics and tables. The surveys cover manufacturing, construction, wholesale, retail, and the service sector as a whole, as well as the industries related to each of those sectors.

Cover ifo Handbuch der Konjunkturumfragen
Article

The ifo Manual of Business Surveys provides an overview of the ifo Institute's surveys as well as the resulting economic indicators and their use for forecasting economic indicators (in German).

Video

ifo Podcast: The ifo Business Climate – A Look behind the Scenes

With its business surveys, the ifo Institute asks thousands of companies every month about various aspects relevant to the business cycle. What questions are asked and why is the indicator so important for business cycle research?

Contact
Dr. Klaus Wohlrabe

Dr. Klaus Wohlrabe

Deputy Director of the ifo Center for Macroeconomics and Surveys and Head of Surveys
Tel
+49(0)89/9224-1229
Fax
+49(0)89/9224-1463
Mail
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