Football World Cups and European Championships Barely Improved Sentiment in the German Economy
Sentiment in the German economy has barely improved during World Cups and European Championships. “At the time of the 2006 World Cup in Germany, there was initially a sense of anticipation in the ifo economic surveys. In the 6 months before the World Cup, the probability of ‘better business’ in the coming months rose by 1.1%,” says Klaus Wohlrabe, Head of Surveys at ifo. “After the World Cup, German companies actually found their business situation slightly better, with the probability of ‘good’ increasing by 1.1%. During and after the World Cup, however, there were no more effects on expectations,” he adds. “We suspect something similar now for the European Championship.”
The ifo Institute also examined the hospitality industry (hotels and restaurants) and the food and beverages sector during the 2006 World Cup in Germany. “We didn’t find any significant effects there,” says Wohlrabe.
The European Championships of the past 20 years were also examined. Companies were somewhat more satisfied with the current business situation and a bit more optimistic for the coming months. The probability that they would give a rating of “good” when asked about the current economic situation was 0.5% higher during a European Championship. In terms of expectations, it rose by 1% according to a long-term analysis since 2005, in which other influences were factored out. “After a European Championship, the probability of companies rating both categories as “good” then drops slightly. In any case, there was no sense of anticipation,” Wohlrabe continues.
