Germany Business Confidence May 2016


Germany: German business sentiment ticks up in May

May 25, 2016

Confidence among German businesses improved and remained in optimistic territory in May. The business confidence index, elaborated by the Ifo Institute, rose from April’s 106.7 to 107.7 in May, which marked the highest reading in five months. The result overshot market expectations of a smaller increase to 106.8.

According to the institute, the improvement reflects that firms turned more optimistic regarding both the current business situation and future business development. The Ifo Institute commented on May’s print that, overall, “the German economy is growing at a robust pace.” Sentiment improved across all sub-sectors. Particularly, sentiment in the construction sector reached a record-high and confidence among manufacturing businesses rose for a third consecutive month. Confidence also strengthened among wholesalers and retailers, contrasting April’s decreases.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 2.8% in 2016, which is up 0.1 percentage points from last month’s forecast. In 2017, the panel sees investment growth accelerating 2.4%.

Author: Teresa Kersting, Economist

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Germany Business Confidence Chart

Germany Business Confidence May 2016

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

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