Germany Business Confidence


Germany: Business confidence falls for second consecutive month

April 21, 2011

Business confidence dropped in April, amid firms' bleaker assessment about future prospects. The business climate index published by the Ifo Institute, fell from 111.1 points in March to 110.4 points in April. The reading, which marked the second consecutive monthly decline after reaching a record high in February, was broadly in line with market expectations that the index would fall to 110.5 points. That said, the index remains 8.6 points above the level observed in the same month last year, suggesting an underlying confidence in the state of the economy. The main driver behind the monthly drop was a decline in firms' future expectations for the next six months, as a result of high oil prices related to the escalating political turmoil in North Africa and the Middle East and the crisis in Japan. In contrast, businesses maintained a positive assessment about their current situation, with the sub-index remaining on the upward trajectory observed since March 2010.

Author:, Senior Economist

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