German Business Sentiment Rises for Fifth Successive Month

29 September 2003

Hope that Europe’s largest economy is climbing out of recession were boosted in September when western Germany’s Ifo business climate index rose from August’s 90.9 to 91.9 – fractionally ahead of economists’ consensus forecast of 91.8.

The index tracks the business climate in manufacturing, construction, retailing and wholesaling. If the upward trend continues, the German economy will move back into growth by the year end.

But the data from Ifo’s sister index – which measures current conditions – was less rosy, falling from 79.9 to 79.2 and confounding expectations of continued growth month-on-month from August.

Although this index invariably lags business sentiment, economists are unsettled by the growing gap between the two indices which suggests that the trend to recovery may be weaker than anticipated.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff