ifo Business Climate Index Rises (October 2023)
Sentiment in the German economy has improved. The ifo Business Climate Index rose to 86.9 points in October, up from 85.8 points (Seasonally adjusted) in September. Companies are somewhat more satisfied with their current business. In addition, managers were less pessimistic in their view of the coming months. Germany’s economy can see a silver lining ahead.
In manufacturing, the Business Climate Index rose slightly. This was due to less skepticism in companies’ expectations. However, they once again assessed their current situation as worse, and the order situation remains difficult.
The business climate in the service sector is considerably more positive. Companies were especially more satisfied with their current business. Their expectations also improved, albeit still marked by misgivings.
In trade, the index fell. Businesses revised their assessments of the current situation downward and are also more pessimistic regarding the coming months. This development was driven primarily by the wholesale segment.
In construction, the index saw a slight increase. The companies assessed their current situation as marginally worse. Their outlook for the coming months was somewhat better but remained pessimistic.
Clemens Fuest
President of the ifo Institute
