By Marco Babic
VIENNA (MaceNews) – German business sentiment improved overall as a more positive view of future developments overcame a more pessimistic assessment of current conditions. It appears that expectations are improving as lockdown measures due to the coronavirus are being eased.
Germany’s Ifo institute reported Monday that business sentiment improved to 79.5 in May from 74.2 in April, having recovered “somewhat after a catastrophic few months.”
While many companies remain pessimistic, “the gradual easing of the lockdown” due to the coronavirus “offers a glimmer of hope,” Ifo President Clemens Fuest said in a statement. This is reflected in the expectations index improving to 80.1 from 69.4 in April and current conditions slipping to 78.9 from a revised 79.4 in April.
The balances by main business sector all showed improvement in May. As with the overall result, manufacturing sentiment improved due to more positive expectations, while current conditions were “once again markedly worse.”
Ifo noted that easing of the lockdown is improving retailer sentiment in particular, while
construction sentiment improved for the first time in seven months due to improved expectations.
In services, providers reported they are more optimistic about the future with the overall climate recovering “notable” from the historic April low as expectations rose strongly while the current situation is “slightly better.” Overall, the balance is still pessimistic. On Thursday Eurostat will release detailed business and consumer sentiment survey results. Earlier this month Eurostat reported flash consumer sentiment for the countries sharing the euro improved by 3.2 points to -18.8 while sentiment in the broader European Union rose 2.5 points to -19.5. Both remain well below their long-term averages of -11.1 and -10.4, respectively. The data for this survey was collected from May 1-19.
Ifo will release results for June business sentiment on June 24.