The Ifo business climate increased by 1.1 points to 86.9 points in October compared to the previous month, as the Ifo Institute announced on Wednesday in Munich. This means that the mood in the German economy has improved for the first time in six months. This is the first increase in Germany’s most important economic barometer since April. “The German economy sees a silver lining on the horizon,” commented Ifo President Clemens Fuest on the results of the survey.
Analysts on average had expected an increase, but had only assumed 86.0 points. The Ifo business climate is based on a survey of around 9,000 companies. In particular, the companies surveyed rated the current situation as better than expected. The corresponding index value rose by 0.5 points to 89.2 points in October, while analysts had expected another setback.
Expectations for future business were also assessed better. The Ifo Institute also announced that there had been a “significant” improvement in the services sector. In the construction and industrial sectors, however, the business climate has only improved slightly, while the corresponding index value for trading companies has fallen. “The noticeable increase in the Ifo business climate indicates a stabilization of sentiment, but not yet an upward trend reversal,” commented chief economist Jörg Krämer from Commerzbank on the data. In his opinion, the business climate remains at a low level and still indicates that the German economy will shrink in the second half of the year.