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ifo Business Climate Index Falls
Munich, 22 March 2018 – Strong sentiment among German businesses weakened slightly this month. The ifo Business Climate Index fell to 114.7 points in March from 115.4 points in February. Companies were slightly less satisfied with their current business situation, which nevertheless remained at a high level.
They were also less optimistic about the months ahead. The threat of protectionism is dampening the mood in the German economy. In manufacturing the business climate deteriorated, but remained at a high level. This was due to markedly less optimistic expectations.
Assessments of the current business situation, by contrast, were marginally better. Demand in manufacturing remains strong. Firms intend to ramp up production, but on a smaller scale than in previous months. In wholesaling the business climate index remained at last month’s level. While wholesalers’ assessments of their current business situation improved, they were less optimistic about their six-month business outlook.
In retailing the business climate deteriorated markedly. The business climate index fell to its lowest level since February 2017. Retailers’ expectations turned slightly pessimistic.
In construction the business climate index rose thanks to markedly more optimistic business expectations. Assessments of the current business situation improved minimally, creeping up to a new record high.
