December 23, 2022

ifo Business Climate Index Rises (December 2022)

Sentiment in the German economy has brightened considerably. The ifo Business Climate Index rose to 88.6 points in December, up from 86.4 points (seasonally adjusted) in November. Companies assessed their current situation as better again. This comes on the heels of six consecutive falls in the indicator for the current situation. Expectations also improved noticeably. German business is entering the holiday season with a sense of hope.

In manufacturing, the index rose substantially. The business climate improved in almost all areas of manufacturing. The expectations indicator climbed particularly strongly. Companies were also more satisfied with their current business. Uncertainty reduced, while the order backlog declined.

In the service sector, the business climate improved markedly once again. This was due above all to dwindling pessimism concerning the coming six months. Service providers also assessed their current business situation as better.

In trade, the index rose to its highest level since June. Businesses assessed their current situation as mildly positive for the first time since August. While the outlook is still pessimistic, it is less so than in November.

In construction, the business climate worsened slightly. Businesses were a little less satisfied with their current situation. Expectations brightened marginally, but remained very pessimistic.

Source: ifo Institute
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