ifo Institute: German Companies Unsure of How Business Will Develop

The coronavirus is currently making it difficult for German companies to predict how their business will develop, judging by the answers to a new question the ifo Institute uses to track the uncertainty of companies. “On a scale of 0 to 100, the value for October was 64.3. This is lower than the value of 73.8 for April, when the coronavirus was at its peak, but still significantly higher than in February, when the ifo Business Uncertainty was 55,” says Klaus Wohlrabe, Head of Surveys at ifo.

The survey presents companies with the following statement: “Predicting how our business will develop is currently easy, fairly easy, fairly difficult, or difficult.” The result is then weighted by the number of answers. “The new question is easy to understand and can be used as an additional tool for economic analysis,” Wohlrabe says.

In the period since April 2019, the new ifo Business Uncertainty has largely run counter to the ifo Business Climate. From now on, the ifo Institute will regularly publish the new measure of business uncertainty in its press releases on the ifo Business Climate.