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German business sentiment shows slight improvement in February: ifo

27 Feb '24
1 min read
Pic: Adobe Stock
Pic: Adobe Stock

Insights

  • In February 2023, German business sentiment slightly improved with the ifo index rising to 85.5 from 85.2, signalling a less pessimistic outlook.
  • The economy shows signs of stabilising at a low level.
  • Manufacturing saw a downturn, hitting its lowest since September 2020, with continued production cuts.
  • The trade sector also faced declines.
The sentiment among German businesses has seen a marginal uplift in February 2023, according to the the ifo Institute. The ifo business climate index, a key indicator of the economic environment, increased to 85.5 points in February from 85.2 points in January, signaling a slightly less pessimistic outlook among companies.

Despite this slight improvement, the overall sentiment suggests that the German economy is merely stabilising at a low level, with the assessments of the current situation showing no change from the previous month, indicating a balance between positive and negative responses, as per ifo.

In the manufacturing sector, the business climate index took a downturn, reaching its lowest assessment of the current situation since September 2020. Companies’ expectations for the future remained nearly as bleak as in the previous month, with a continuing decline in the order backlog and announcements of further production cuts, reflecting persistent challenges in the industry.

The trade sector also experienced a decrease in its index, with companies reporting a noticeable drop in satisfaction with their current business situation. However, there was a slight improvement in expectations, albeit companies remain deeply sceptical about future business development.

ALCHEMPro News Desk (DP)

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