Economic indicators suggest a temporary rebound in the German wholesale trade, according to the Ifo Institute. The corresponding business climate index rose to -17 points in May, following a -33 point reading in April, the institute reported on Wednesday.
“Ifo’s business experts noted a significant improvement in the sentiment among wholesale traders in May, but warned it would be premature to sound the all-clear, given the unpredictable US tariff policies” said Ifo’s sector expert, Ulrike Mandalka.
The wholesale trade, specifically the production connection trade, serves as a vital link between manufacturers, suppliers and consumers, as well as the processing industry, craft and construction sector. As a result, it is considered an early indicator of the economic development.
Wholesale traders evaluated both their current business situation and expectations more positively in May, with the expectation index rising to -20 points, following a -41 point reading and the business situation index rising to -14 points, following a -25 point reading.
The wholesale trade in consumer goods also showed a positive trend, with the business climate index rising to -13 points, following a -24 point reading in April. Wholesale traders assessed their current situation less pessimistically, at -14 points, compared to -21 points in the previous month. Moreover, their business expectations increased significantly to -11 points, following a -27 point reading in April.