Summary: ifo business climate index up again in May; above expected figure; expectations, current conditions indices both up; index consistent with positive euro-zone GDP growth.
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 of that year was almost as sharp but it was also characterised by a period of below-average readings which lasted until early 2021.
According to the latest figures released by the Institute, its business climate index increased to 99.2 in May. The reading was above the expected reading of 97.8 and 2.6 points above April’s final reading of 96.6. The average reading since January 2005 is just below 97.
“Sentiment among German managers has improved considerably,” said Clemens Fuest, the president of the ifo Institute. “The German economy is picking up speed”. He noted the index registered its highest reading since May 2019.
The expectations index increased, rising from April’s revised figure of 99.2 to102.9, also above the generally-expected figure of 101.0. The current situation index rose from 94.2 to 95.7.
