The ifo Index (most important German economic barometer) for the month of January is only at 95.9 points (forecast was 97.0; previous month was 96.3).
The current assessment of the situation is 99.1 (forecast was 99.2; previous month was 98.8).
Business expectations are significantly weaker. They stand at 92.9 (forecast was 95.0; previous month was 93.8).
Klaus Wohlrabe (ifo) comments: “German economy starts the new year cautiously. Surprising economic slowdown. Manufacturing industry shows signs of recovery, but service sector noticeably weaker, construction index has also fallen.
Read the press release of the ifo:
“The mood in the German management floors fell slightly at the start of the year. The ifo business climate index fell to 95.9 points in January, after 96.3 points in December. This was due to more pessimistic expectations of companies. In contrast, the indicator for the current situation rose slightly. The German economy has made a cautious start to the new year.
The manufacturing industry is showing signs of recovery. The business climate has improved noticeably. In particular, the index on the current situation rose significantly. A stronger rise was last observed in February 2017. In addition, the pessimism of businesses with regard to the coming months declined again. Capacity utilization rose from 82.6 to 83.1 percent.
In the services sector, the indicator has fallen noticeably. This was due to noticeably more cautious expectations on this sector of companies. By contrast, they were somewhat more satisfied with their current situation.
The business climate has improved in the retail sector. Indicators of the current situation and expectations were higher than in the previous month. However, this was only due to the wholesale trade. Retailers were more cautious in their comments.
In the construction sector, the index has declined. The assessments of the current situation fell to its lowest level since June 2018. In addition, scepticism with regard to the coming months increased again.”