ifo Business Climate Index Rises Strongly (June 2020)
Sentiment among German companies has brightened further. The ifo Business Climate Index rose from 79.7 points (seasonally adjusted) in May to 86.2 points in June. This is the strongest increase ever recorded. Companies’ assessments of their current situation were somewhat better. Moreover, their expectations leaped higher. German business sees light at the end of the tunnel.
In manufacturing, the Business Climate Index again rose significantly. This was due to notably improved expectations among industrial companies. Never before have expectations risen so strongly. However, a great majority of companies still assess their current situation as poor.
In the service sector, the business climate continued its steep rise in June. There was a particularly pronounced reduction in service providers’ pessimism regarding the coming six months. Assessments of the current situation also improved markedly.
In trade, the Business Climate Index once again jumped higher. The indicators of the current situation and of expectations recovered notably compared to the previous month. However, many traders still expect disappointing business development. At the moment, the mood in retail is less pessimistic than in wholesale.
In construction, less pessimistic expectations once again lifted the business climate. Construction companies assessed their current situation as a little better than last month.
Clemens Fuest
President of the ifo Institute
