Ifo Business Survey for August 2010

In August the Ifo Business Climate for German trade and industry has continued its slight improvement. The Ifo Business Climate Index thus confirms its clear rise of July. The firms again assess their current business situation more positively than in the preceding month. Regarding developments during the next six months they are only marginally less optimistic than before. The Business Climate has developed differently in the individual sectors, however: The August improvement derives from a more favourable climate in retailing and a better current business situation in the manufacturing industry. Although business expectations of industrial companies are not quite as optimistic as most recently, the business climate index of the manufacturing industry rose due to the more positive assessment of the current situation. The Business Climate Index of wholesaling declined marginally, that of the construction industry a bit more strongly. However, in particular the current business situation of firms in the construction industry may be considered to be rather good. The upward trend of the economy is therefore intact. The risks to the German recovery must be sought in the future development of the world economy, with a special focus on the United States and China.