Economic Indicators Remain Unchanged in February, According to Ifo Survey
The Ifo economic expectations index remained nearly unchanged in February, standing at 19.4 points, following 19.5 in January. “Despite the weak economic development, inflation in Germany remains above the European Central Bank’s target” said Ifo Chief Economist Timo Wollmershäuser. While service providers less frequently plan to increase their prices, companies in the industrial and retail sectors see more room for price hikes.
The index for service providers fell significantly to 24.0 points, down from 32.2 in January. The main reason is that companies in the corporate sector less frequently plan to increase their prices, with a reading of 21.8 points, down from 33.7. Similarly, the index for consumer-facing service providers also saw a slight decrease to 26.9 points, down from 27.5.
In the manufacturing sector, the price expectations index rose to 11.0 points, up from 6.9 in January. The main drivers of the increase were the producers of consumer goods, who plan to increase their prices more frequently, with a reading of 20.8 points, up from 16.0. Producers of investment and intermediate goods also plan to increase their prices more frequently, with readings of 18.0 and 4.8 points, up from 17.5 and 1.8, respectively.
In the retail sector, the price expectations index rose to 33.2 points, up from 30.5 in January, mainly driven by the food and beverage trade, with a reading of 46.6 points, up from 39.6. The price plans for the rest of the retail sector, however, remained unchanged at 32.9 points.
The construction industry is expected to see the smallest price increases, with the index rising slightly to 1.0 point, up from 0.8 in January.
The Ifo price expectations index gives the percentage of companies that plan to increase their prices, minus the percentage of those that plan to decrease their prices. If all surveyed companies intended to increase their prices, the index would stand at +100 points and if all intended to decrease their prices, it would be -100. The index is seasonally adjusted and the Ifo Institute does not ask about the magnitude of the planned price changes.