Ifo Business Survey for February 2004

The business climate in German trade and industry deteriorated in February after a continuous upward development of nine months. This was caused by the less optimistic expectations of the enterprises, particularly in western Germany. The still unsatisfactory business situation remained largely unchanged, on average, improving somewhat in the west but worsening slightly in the east. No imminent trend change can be derived from the cooling of the business climate. As a rule, this is only the case if the indicator declines three times in succession. Ifo presumes that the survey reflects a correction of the too optimistic expectations, especially since the economic recovery has been sluggish.