ifo Business Climate Index Falls (June 2019)
The mood among German company managers has cooled further. The ifo Business Climate Index fell from 97.9 points in May to 97.4 points in June. This is its lowest level since November 2014. Companies have grown increasingly pessimistic about the coming months. However, their assessment of the current business situation improved marginally. The German economy is heading for the doldrums.
In manufacturing, the business climate index fell once again. While the indicator of the current situation is still above its long-term average, it has now been falling for over a year. As to business expectations, last month’s ray of light has disappeared. Industrial companies’ pessimism grew, due primarily to shrinking order books.
In the services, the business climate worsened, driven by noticeably less optimistic expectations. In contrast, service providers were more positive in their assessment of the current business situation.
In trade, the index rose. Companies were more satisfied with their current situation. They were also more confident about the coming months. For wholesalers, the improvement was stronger in the index of expectations; for retailers, it was the indicator of the current business situation that rose more.
In construction, the business climate index fell, but remains at a high level. Companies’ assessment of their current situation worsened. Their business expectations for the coming six months also fell.
Prof. Dr. Dr. h.c. Clemens Fuest
President
