ifo Business Climate Index Falls for Third Consecutive Month (July 2023)
Sentiment among German companies has worsened further. The ifo Business Climate Index fell to 87.3 points in July, down from 88.6 points (seasonally adjusted) in June. This is its third consecutive fall. In particular, companies were notably less satisfied with their current business. Expectations were also lower. The situation in the German economy is turning bleaker.
In manufacturing, the Business Climate Index dropped. The drivers of this development were noticeably poorer assessments of the current situation. Expectations were also more pessimistic. Companies are receiving ever fewer new orders. Capacity utilization fell by 1.4 percentage points to 83.0 percent. This marks the first time in over two years that it has fallen below its long-term average of 83.6 percent.
In the service sector, the index weakened. Service providers were markedly less satisfied with their current business situation. However, their expectations for the coming months were somewhat less pessimistic.
In trade, the business climate deteriorated. The outlook was noticeably dimmer. Businesses also offered worse assessments of their current situation.
In construction, the Business Climate Index fell to its lowest level since February 2010. Dissatisfaction with the current situation was considerably greater. The outlook was also more pessimistic for the months ahead.
Clemens Fuest
President of the ifo Institute
Survey
ifo Business Climate Index Falls for Third Consecutive Month (July 2023)
Sentiment among German companies has worsened further. The ifo Business Climate Index fell to 87.3 points in July, down from 88.6 points in June. This is its third consecutive fall. In particular, companies were notably less satisfied with their current business. Expectations were also lower. The situation in the German economy is turning bleaker.
