What is Behind the ifo Business Climate? Companies’ Assessments of their Current Situation and Expectations

The two most important questions in the ifo Business Survey are those on the current business situation and on expectations for the next six months. Both questions are very general and offer a lot of room for interpretation. But how do companies interpret these questions? In order to better understand the response behavior of companies, a meta-survey was conducted on the general Business Survey. The results show that it is primarily the internal company factors of earnings situation, demand, and sales that are taken into account in assessing both the business situation and expectations.