A Thyssen Group steel mill.Foto: Sean Gallup/Getty Images)
The ifo business climate index rose slightly in April. However, many experts had expected a stronger increase.
The mood in the German economy has continued to improve. The ifo business climate index rose to 93.6 points in April, after 93.2 points in March, as the Munich institute announced on Monday (April 24). However, this new value is below the forecasts of some experts, who had expected a somewhat stronger increase.
According to ifo, the increase is due to the improved expectations of companies. On the other hand, they assessed their current situation as somewhat worse. The worries of German companies eased, but the economy is lacking momentum, according to the ifo Institute.
In the manufacturing sector, the index rose slightly. On the one hand, the optimistic voices with regard to future development have increased noticeably, on the other hand, companies have rated their current business significantly worse. Production is to be expanded in the coming months. Capacity utilization rose from 84.3 to 84.5 percent and is thus above the long-term average of 83.6 percent.
In the service sector, meanwhile, the upward movement in the business climate of the last few months has come to an end. The service providers assessed their current situation somewhat worse. In addition, pessimism about the coming months increased again for the first time.
trade weaker
In trading, the index fell slightly: traders were a little less satisfied with the current situation, but pessimism about expectations continued to decrease. Due to weak sales development, many retailers are still reluctant to order goods.
In construction, the business climate indicator rose again. Expectations for the coming months have improved, but concerns remain high. The assessment of the current situation fell to its lowest level since December 2015.
The Ifo business climate index is considered an important early indicator for economic development in Germany. It is based on around 9,000 monthly reports from companies in the manufacturing industry, the service sector, trade and the main construction trades. The companies are asked to assess their current business situation and their expectations for the next six months. (dts/mf)
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