Ifo: Ger­many busi­ness cli­mate in­dex drops markedly

Financial Mirror (Cyprus) - - FRONT PAGE -

Sen­ti­ment among Ger­man busi­nesses weak­ened at the be­gin­ning of the year, with the Ifo Busi­ness Cli­mate In­dex for in­dus­try and trade fall­ing to just 107.3 points in Jan­uary from 108.6 points in De­cem­ber.

As­sess­ments of the cur­rent busi­ness sit­u­a­tion were scaled back slightly, but re­mained very good, the Ifo re­port said, adding that “busi­ness ex­pec­ta­tions, by con­trast, clouded over sig­nif­i­cantly as the year started with an un­pleas­ant sur­prise for the Ger­man econ­omy,” ac­cord­ing to Dr Hans-Werner Sinn, Pres­i­dent of the Ifo In­sti­tute.

In man­u­fac­tur­ing, the busi­ness cli­mate in­dex fell to a 12-month low, the Mu­nich-based re­search in­sti­tute said. Favourable as­sess­ments of the cur­rent busi­ness sit­u­a­tion were only scaled back a lit­tle, but busi­ness ex­pec­ta­tions were sub­stan­tially re­vised down­wards. Al­though the chem­i­cals sec­tor ben­e­fited from low oil prices, sen­ti­ment weak­ened in sev­eral other branches, in­clud­ing me­chan­i­cal en­gi­neer­ing and the au­to­mo­tive sec­tor, mainly due to the poorer ex­port out­look. Ca­pac­ity util­i­sa­tion rates in man­u­fac­tur­ing on the whole rose by 0.6 per­cent­age points to 85.1%.

In whole­sal­ing, the busi­ness cli­mate in­dex rose, mainly due to far bet­ter as­sess­ments of the cur­rent sit­u­a­tion. Whole­salers’ busi­ness ex­pec­ta­tions, by con­trast, de­te­ri­o­rated slightly. In re­tail­ing, the in­dex re­mained al­most un­changed.

While re­tail­ers were slightly less sat­is­fied with their cur­rent sit­u­a­tion, their busi­ness ex­pec­ta­tions turned

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