Business climate in Germany improves for the second month in a row

Business climate in Germany improves in February for a second month in a row, according to the seasonally-adjusted index by the Munich-based Leibnitz Institute for Economic Research (Ifo). The Business climate indicator grew to 98.9 (the highest level since September 2021) compared to a revised 96 in January. 

Both of the sub-indices increased in January with the current situation one posting its first upward movement since August 2021, reaching 98.6 in February from 96.2 in January. The expectations indicator, on the other hand is now on a two-month long positive streak, inching up to 99.2 from 95.8 in the previous month.

The fresh data is slightly above expectations, suggesting that German businesses are not yet very unnerved by the diplomatic tension between Russia and Ukraine, taking into account that Germany imports energy from Russia. 

The sectoral breakdown also points to an improved business climate in manufacturing, services, retail and construction, as the respective indicators, measured as balances, improve. Only the wholesale trade posts slight deterioration.

Explore more visuals and analysis here.

Read more in the quarterly report Euro Area Economy in a Snapshot - Q1 2022