ifo Business Climate Index Sees a Minimal Decline (August 2022)
A bleak mood hangs over the German economy. The ifo Business Climate Index fell in August to 88.5 points, down from 88.7 points in July. Companies were somewhat less satisfied with their current business, and the strong pessimism of their outlook for the coming months is virtually unchanged. Uncertainty among the companies remains high, and the German economy as a whole is expected to shrink in the third quarter.
The index in manufacturing is unchanged. While companies assessed their current situation as worse, their expectations were less pessimistic. Order backlogs declined again slightly. The chemical industry in particular reported serious problems.
In the service sector, the business climate recovered slightly after its drastic plunge the previous month. Companies viewed their current situation as somewhat better, although their expectations remain pessimistic. Sentiment in tourism picked up somewhat, although the hospitality segment expects a considerable deterioration in its business.
The indicator in trade continued its downward slide. Fewer and fewer companies are reporting a positive business situation, and their expectations are still extremely pessimistic. Many enterprises are facing a dilemma: high inflation is dragging down their business, but they can hardly avoid raising prices due to increased costs.
The business climate in construction improved. Companies assessed their current situation as somewhat better, and their pessimism regarding the coming months has lessened a bit.
Clemens Fuest
Präsident des ifo Instituts
Survey
ifo Business Climate Index Sees a Minimal Decline (August 2022)
A bleak mood hangs over the German economy. The ifo Business Climate Index fell in August to 88.5 points, down from 88.7 points (seasonally adjusted) in July. Companies were somewhat less satisfied with their current business, and the strong pessimism of their outlook for the coming months is virtually unchanged. Uncertainty among the companies remains high, and the German economy as a whole is expected to shrink in the third quarter.
