Ifo Business Climate Germany

Results of the Ifo Business Survey for October 2015

Ifo Business Climate Index Declines Only Slightly
The Ifo Business Climate Index for German industry and trade fell to 108.2 points in October, from
108.5 points in September. Companies were slightly less satisfied with their current business
situation than in September. Optimism with a view to future business developments nevertheless
continued to grow. The German economy is proving remarkably resilient in view of this autumns
multiple challenges.
Indeed the Volkswagen scandal has had no impact on the German automotive industry. The climate
index for the automotive sector even continued to rise this month. Assessments of the current business
situation and business expectations both improved. Firms plan to ramp up production. Exports, however,
are not expected to provide further stimuli.
In manufacturing on the whole, however, the business climate index fell for the third month in
succession. Manufacturers scaled back their very good assessments of the current business situation.
They nevertheless expect business to pick up in the near future. Capacity utilisation rose marginally to
84.4%.
In wholesaling the business climate remained unchanged. While wholesalers slightly scaled back their
very good assessments of the current business situation, they expressed greater optimism about the
months ahead. In retailing the business climate index fell. This was mainly due to markedly less
favourable assessments of the current business situation. Also, business expectations deteriorated
slightly.
In construction, the business climate improved for the third month in succession. While contractors
assessed their current business situation somewhat less favourably, they were more optimistic about the
months ahead.
Hans-Werner Sinn
President of the Ifo Institute

Germany (Index, 2005 = 100, seasonally adjusted)

Month/year

10/14 11/14 12/14 01/15 02/15 03/15 04/15 05/15 06/15 07/15 08/15 09/15 10/15
103.6 104.8 105.7 106.8 106.8 107.9 108.6 108.5 107.6 108.0 108.4 108.5 108.2
Climate
108.0 109.4 110.1 111.9 111.5 112.3 114.2 114.4 113.3 114.0 114.8 114.0 112.6
Situation
99.3 100.3 101.5 101.9 102.4 103.8 103.4 103.0 102.1 102.4 102.2 103.3 103.8
Expectations
Source: Ifo Business Survey.
For long time-series in Excel format consult www.cesifo-group.de/langereihen.

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Ifo Business Climate Germany (Balances, seasonally adjusted)

Month/year
Trade and Industry
Manufacturing
Construction
Wholesaling

10/14 11/14 12/14 01/15 02/15 03/15 04/15 05/15 06/15 07/15 08/15 09/15 10/15
0.5
2.8
4.6
6.7
6.8
8.9 10.2 10.1
8.2
9.0
9.7 10.1
9.3
2.6

4.2

7.5

9.4

9.5

12.6

14.2

13.6

11.1

11.4

11.1

10.1

9.7

-3.7

-3.2

-5.2

-5.6

-5.7

-7.6

-5.2

-4.7

-3.6

-4.2

-2.6

0.3

0.8

0.2

6.0

7.3

8.6

8.4

10.3

12.7

10.0

7.7

14.2

13.3

13.7

13.7

-5.5

-2.2

-3.9

3.4

3.5

5.3

2.8

7.0

5.8

4.1

10.8

14.7

10.9

Retailing
Source: Ifo Business Survey.

Explanatory note: The Ifo Business Climate Index is based on ca. 7,000 monthly survey responses from firms in
manufacturing, construction, wholesaling and retailing. The firms are asked to give their assessments of the current
business situation and their expectations for the next six months. They can characterise their situation as good,
satisfactory or poor and their business expectations for the next six months as more favourable, unchanged or more
unfavourable. The balance value of the current business situation is the difference between the percentages of the
responses good and poor; the balance value of the expectations is the difference between the percentages of the
responses more favourable and more unfavourable. The business climate is a transformed mean of the balances of the
business situation and the expectations. For the purpose of calculating the index values, the transformed balances are all
normalised to the average of the year 2005.

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Ifo Business Climate in the German Service Sector

Results of the October 2015 Ifo Business Survey
Ifo Business Climate Indicator Hits New Record High
The Ifo Business Climate indicator for the German service sector hit a new record high of 32.4 balance
points in October versus 30.5 balance points in September. The number of positive reports of
expectations continued to climb, reaching their highest level since December 2010. By contrast, service
providers revised their very good assessments of the current business situation downwards. Personnel
plans remain expansive.
Hans-Werner Sinn
President of the Ifo Institute

German Service Sector (balances, seasonally adjusted)

Month/Year

10/14 11/14 12/14 01/15 02/15 03/15 04/15 05/15 06/15 07/15 08/15 09/15 10/15
22.9
20.2
26.8
25.7
23.7
24.3
23.9
26.7
28.5
26.1
30.8
30.5
32.4
31.7
29.8
35.0
34.5
29.6
34.1
37.0
39.1
39.2
38.0
42.0
42.9
40.7
14.4
10.9
18.9
17.2
18.0
15.0
11.6
14.9
18.3
14.8
20.1
18.7
24.4
Expectations
Source: Ifo Business Survey.
Climate
Situation

For long time-series in Excel format consult www.cesifo-group.de/langereihen.

Explanatory note: The Ifo Business Survey of the service sector is based on ca. 2,500 monthly survey responses from
firms in key segments of the tertiary sector, especially business-oriented segments (excl. distribution, financial services,
Leasing, insurance and government). The survey is conducted and calculated in the same way as the Ifo Business Survey
of industry and trade. The indicator for the Business Climate in the service sector has not yet been incorporated into the Ifo
Business Climate Index for industry and trade.

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