ifo: Business Climate Index Rises in May

Sentiment among companies in Germany has recovered slightly following the slump in March and April. The ifo Business Climate Index increased in May to 84.9 points, from 84.5 points in April. The companies assessed the current business situation somewhat more favorable. Expectations for the coming months are also less pessimistic. The German economy is stabilizing for the time being, although situation remains fragile.

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In manufacturing, the business climate improved somewhat due to more positive assessments of the current situation. However, expectations continued to decline. The number of new orders fell.

In the service sector, the index improved considerably. Expectations, in particular, recovered following the slump in the previous two months. The companies also assessed their current business situation to be somewhat more favorable. Sentiment in the logistics industry remains tense, but is no longer as catastrophic as it was in April. The same also applies to the tourism industry.

In trade, the index rose again. The companies viewed the current situation more favorable. Pessimism in terms of expectations also declined a little. However, the situation continues to be difficult given that wholesaler and retailer consumer spending remains down.

In construction, the business climate fell slightly. This was due to a less favorable assessment of the business situation. Expectations rose somewhat following the slump in April. However, the companies remain skeptical.

More information: www.ifo.de

ifo Institut für Wirtschaftsforschung e.V., München