Summary: ifo business climate index down in January; less than expected figure; ifo president says second wave brings German recovery “to a halt for now”.
Following a recession in 2009/2010, the ifo Institute’s business climate index largely ignored the European debt-crisis of 2010-2012, remaining at average-to-elevated levels through to early-2020. However, the index was quick to react in the March 2020 survey, falling precipitously. The rebound which began in May was almost as sharp but readings through to the end of 2020 did not continue that trend.
According to the latest figures released by the Institute, its business climate index fell to 90.1 in January, continuing a six-month run of readings near 90. The reading was just below the expected reading of 91.4 and 2.1 points below December’s final reading of 92.2. The average reading since January 2005 is just above 97.
The expectations index also lost ground, falling from December’s revised figure of 93.0 to 91.1 in January, also below the expected figure of 93.6. The current situation index declined from 91.3 to 89.2.
“Companies assessed their current situation as worse than last month. Their expectations were also more pessimistic. The second wave of coronavirus has brought the recovery of the German economy to a halt for now,” said Clemens Fuest, the president of the ifo Institute.
