ifo Business Climate Index Falls (January 2024)
Sentiment among German companies has deteriorated further at the beginning of the year. The ifo Business Climate Index fell to 85.2 points in January, down from 86.3 points in December. Companies assessed their current situation as worse. Their expectations for the months ahead were also once again more pessimistic. The German economy is stuck in recession.
In manufacturing, the Business Climate Index rose. Companies were somewhat more satisfied with their current business. Their expectations also improved but remained pessimistic. Order books continue to shrink, albeit less rapidly than at the end of the year. Capacity utilization softened from 81.9 percent to 81.0 percent. That is some two and a half percentage points lower than its long-term average.
The business climate in the service sector clouded over considerably. This was due in particular to markedly worse assessments of the current situation. Service providers were much more dissatisfied with their order backlog. Their expectations were also a little more pessimistic.
In trade, the index fell to its lowest level since October 2022. Trading companies were less satisfied with their current business situation. Their expectations also deteriorated. This is the case for both wholesalers and retailers.
In construction, the Business Climate Index continued to slide. Companies assessed their current business situation as worse. Their already bleak outlook for the coming months turned even darker.
Clemens Fuest
Präsident des ifo Instituts
Survey
ifo Business Climate Index Falls (January 2024)
Sentiment among German companies has deteriorated further at the beginning of the year. The ifo Business Climate Index fell to 85.2 points in January, down from 86.3 points in December. Companies assessed their current situation as worse. Their expectations for the months ahead were also once again more pessimistic. The German economy is stuck in recession.
