ifo: Business Climate Index Down in March

Sentiment among companies in Germany has dropped by a considerable degree. The ifo Business Climate Index fell in March to 86.4 points, down from 88.4 points in February as a result of more pessimistic expectations. Assessments of the current situation, however, remain unchanged. Uncertainty among companies has increased noticeably. The war in Iran has put any hope of a recovery on ice for the time being.

In manufacturing, the index fell, following increases in recent months. Expectations, in particular, have declined significantly. The companies also assessed their current situation less favorably. Energy-intensive industries are most affected.

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In the service sector, the business climate worsened considerably. Although the current situation is assessed as being slightly better, expectations have slumped massively. Particularly tourism and the logistics industry have seen a major decline in sentiment.

In trade, the index fell due to a significantly more pessimistic outlook. Fears of rising inflation among the population in Germany have seen expectations in both the wholesale segment and among retailers drop considerably. The trade industry was, however, a little more content with the current business situation.

In construction, the business climate declined significantly, with expectations falling more sharply than at any time since March 2022. The current situation, on the other hand, was assessed more favorably.

More information: www.ifo.de

ifo Institut für Wirtschaftsforschung e.V., Munich, Germany