ifo Business Climate Index declines (June 2023)
Sentiment in the German economy has clouded over considerably. In June, the ifo Business Climate Index fell to 88.5 points, down from 91.5 points in May. Expectations were markedly pessimistic and companies’ assessments of their current situations were worse. Above all, the weakness in the manufacturing sector is steering the German economy into turbulent waters.
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In manufacturing, the business climate deteriorated substantially. Expectations saw a significant decline, falling to their lowest level since November 2022. Hardly any industry has been left untouched by this development. The current situation was also assessed as worse. Meanwhile, many companies rate their order backlogs as too low.
The index fell in the service sector. Companies were less satisfied with their current situation and their expectations were significantly more pessimistic. Transport and logistics in particular are suffering from the negative development in manufacturing.
In trade, too, the index declined. Companies were somewhat less satisfied with their current business. Although expectations improved slightly, they remained largely pessimistic.
In construction, the business climate indicator went down. Companies were somewhat less satisfied with their current situation and their expectations of the coming months deteriorated.
ifo Business Climate Germany
(Index, 2015 = 100, seasonally adjusted)
06/22 | 07/22 | 08/22 | 09/22 | 10/22 | 11/22 | 12/22 | 01/23 | 02/23 | 03/23 | 04/23 | 05/23 | 06/23 | |
Climate | |||||||||||||
Situation | |||||||||||||
Expectations |
Source: ifo Business Survey.
© ifo Institute
ifo Business Climate Germany and by Sector
(Balances, seasonally adjusted)
06/22 | 07/22 | 08/22 | 09/22 | 10/22 | 11/22 | 12/22 | 01/23 | 02/23 | 03/23 | 04/23 | 05/23 | 06/23 | |
Germany | |||||||||||||
Manufacturing | |||||||||||||
Service Sector | |||||||||||||
Trade | |||||||||||||
Construction |
Source: ifo Business Survey.
© ifo Institute