By Marco Babic
ZURICH (MaceNews) – German business conditions started the year off on a negative note as the second wave of the COVID-19 pandemic pushed both current conditions and business expectations lower, the Munich-based Ifo Institute said in a report Monday.
Ifo’s Business Climate Index for January fell to 90.1 in January from a revised 92.2 (92.1) the prior month, lower than the median forecast of 91.4 in an Econoday survey of forecasters. The result was also lower than the most pessimistic forecast of 90.4.
Expectations fell to 91.1 from a revised 93.0 (92.8) the previous month, the worst reading since the 71.8 registered in April of 2020, when the COVID-19 pandemic had its first full impact on the index. Economists expected an improvement in the outlook, with the median forecast for 93.2.
Current Conditions suffered as well, falling to 89.2 from 91.3 the prior month, missing the median forecast of 90.5 in the Econoday survey.
Ifo said confidence in all major sectors declined, with manufacturing dropping in January for the first time in eight months. While current conditions improved, expectations are “noticeably less optimistic”.
Services saw weaker order intake, particularly in logistics and transportation. At the same time, the trade sector “nosedived”, with sentiment worsening in “almost all” retail sectors.
Today’s Ifo report stands in contrast to the ZEW Institutes report earlier this month with saw an increase in economic sentiment.
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Contact this reporter: marco@macenews.com.
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