Germany Business Confidence


Germany: Business confidence improves again in January

January 26, 2015

The business confidence index, elaborated by the Ifo Institute, rose from 105.5 in December to 106.7 in January, coming in slightly above market expectations. Following the declines recorded between May and October in 2014, the index rose for a third consecutive month and continued in January to recover some of the lost ground. Now the index sits at the highest level in six months.

According to the Institute, January’s print reflected that firms were more optimistic regarding their current situations and future business developments. Business confidence rose again in the manufacturing sector and the Ifo Institute noted that, “stronger impulses are expected from exports thanks to the falling euro exchange rate.” The business climate also improved for wholesaling and retailing. However, confidence deteriorated slightly in the construction sector. Overall, the Ifo Institute commented that the reading suggests that, “[t]he German economy makes a good start to the year.”

FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 1.8% in 2015, which is up 0.1 percentage points from last month’s forecast. In 2016, the panel sees investment growth decelerating 3.7%.

Author: Teresa Kersting, Economist

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Germany Business Confidence Chart

Germany Business Confidence January 2015 0

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

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