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ifo Business Climate Index Plunges to Historic Low

ifo Business Climate Index Plunges to Historic Low. Sentiment at German companies is catastrophic. The ifo Business Climate Index crashed from 85.9 points1 in March to 74.3 points in April.…


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Clemens Fuest – President of the Ifo Institute


This is the lowest value ever recorded, and never before has the index fallen so drastically. This is primarily due to the massive deterioration in the current situation. Companies have never been so pessimistic about the coming months.

The coronavirus crisis is striking the German economy with full fury.

In manufacturing, the Business Climate Index has fallen to its lowest value since March 2009. Industrial companies’ current business situation worsened dramatically. Expectations are marked by extreme pessimism.

The expectations indicator fell to a historic low. Demand for industrial products has collapsed.

In the service sector, the business climate indicator fell to a record low. Service providers have never reached such a poor assessment of their current situation. The pessimism of their expectations is also without precedent.

In trade, the Business Climate Index continued to nosedive. Assessments of the current situation have never worsened so quickly. Expectations came in even lower than March’s record low.

In construction, the index has never sunk so abruptly. The same is true for the indicator of the current situation and for expectations. However, the majority of construction companies are still satisfied with their current situation.

Source: ETFWorld – CESifo

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