ifo Business Climate Index Falls (June 2022)
Sentiment in German business has clouded over. The ifo Business Climate Index fell to 92.3 points in June, down from 93.0 points in May. Companies were somewhat less satisfied with their current business situation. Their expectations turned markedly more pessimistic. The threat of gas shortages is of great concern to the German economy.
In manufacturing, the index took a significant hit. Companies assessed the current situation as slightly less good. Moreover, they are considerably more pessimistic about the second half of the year. The chemical industry is thoroughly alarmed.
In the service sector, the business climate clearly improved. This was due to a substantial reduction in service providers’ skepticism. They assessed the current business situation as a little better. Hospitality is having a very good summer. Transport and logistics, however, is tangibly pessimistic about the second half of the year.
In trade, the Business Climate Index took a nosedive. Businesses are much less satisfied with their current situation. The index of their expectations fell to its lowest level since April 2020. Wholesalers and retailers are equally troubled when they look to the coming months.
In construction, the business climate continued to climb. Companies assessed their current business as better. They also corrected their expectations upward, but are still noticeably pessimistic. ¬
