Companies happier: IFO: Currently no signs of recession

Despite all the problems, Germany's economy is proving to be robust.

Companies happier: IFO: Currently no signs of recession

Despite all the problems, Germany's economy is proving to be robust. The mood in the executive floors is brightening. In the construction industry in particular, the previous pessimism is waning. However, all sectors remain cautious when looking to the future.

The mood in the German economy has brightened almost three months after the beginning of the Ukraine war. The IFO business climate index on a monthly basis rose from 91.9 to 93.0 points in May, as the Munich Institute announced. The companies were "above all noticeably more satisfied with the current business". Expectations, on the other hand, hardly changed, and companies remained skeptical. "The German economy is proving to be robust despite inflation concerns, material shortages and the war in Ukraine," said IFO President Clemens Fuest. There are currently no signs of a recession.

Around 9,000 companies answer questions from the IFO Institute every month for the business climate index. They are asked to assess their current business situation and their expectations for the next six months.

According to the survey, the mood in the manufacturing sector improved noticeably. The companies assessed the current situation somewhat better. Their expectations also increased significantly. The companies are still "noticeably skeptical" with a view to the coming months.

The index also rose in the service sector: service providers were noticeably more satisfied with current business. Their expectations, on the other hand, turned out to be more pessimistic again. Transport and logistics companies in particular were worried, the IFO explained.

In trade, the business climate indicator rose again after two declines in a row, mainly because the assessments of the current situation improved. Although expectations were slightly better than in April, they remained clearly pessimistic.

According to the IFO survey, expectations in the main construction trades, where business sentiment had virtually plummeted in April, improved again. The companies also rated their ongoing business somewhat better. According to the survey, the majority remains pessimistic.


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