Germany Business Confidence July 2016


German business sentiment moderates in July

Confidence among German businesses weakened slightly but remained comfortably in optimistic territory in July. The business confidence index, elaborated by the Ifo Institute, fell from June’s seven month-high of 108.7 to 108.3 in July. The result exceeded market expectations of a more pronounced decrease to 107.5.

According to the institute, the setback reflects that firms turned less optimistic regarding future business development, while their assessment of the current business situation improved slightly to a nearly-one-year high. The Ifo Institute commented on July’s print that, “the German economy proves resilient,” even though, “sentiment […] weakened slightly in the wake of the Brexit referendum.” Sector-wise, sentiment fell in the manufacturing and wholesaling sectors. Conversely, sentiment increased in the retailing and construction sectors, with the latter hitting a new record-high.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 2.8% in 2016, which is down 0.2 percentage points from last month’s forecast. In 2017, the panel sees investment growth accelerating 2.0%.

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Germany Business Confidence Chart

Germany Business Confidence July 2016 0

Note: Ifo Business Climate Index, 2000=100.
Source: Ifo Business Survey.

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