German Businesses Show Signs of Improvement in June, Ifo Index Reveals
Germany’s business climate index, as measured by the Ifo Institute, has shown a slight uptick in June, according to the economic research institution’s latest report. The index rose to 88.4 points, up from 87.5 points in May, with a notable improvement in the expectations of German companies.
While the current business situation was assessed as only slightly better by the companies, their outlook for the coming months has brightened. The Ifo Institute’s president, Clemens Fuest, noted that the companies remain dissatisfied with their order books.
A closer look at the data reveals a more nuanced picture. The manufacturing sector saw a slight improvement, with companies showing a more optimistic view of the future, although their current business situation was deemed to be worse. In contrast, the service sector, particularly companies providing services to businesses, experienced a significant boost in the index, with a more positive assessment of their current situation and a substantial upward revision of their expectations.
The retail sector, driven by the wholesale trade, also showed an improvement in the business climate, with retailers expressing greater satisfaction with their current business and less pessimistic expectations. In contrast, the retail trade itself saw a small decline in the index.
The construction sector, which has been a bright spot in recent months, continued its upward trend, with expectations reaching their highest level since February 2022, although still tinged with skepticism. The assessment of the current business situation in this sector remained unchanged.