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Business Climate Reverses Higher in Germany

The German business climate improved this month after declining in January

Skerdian Meta•Monday, February 22, 2021•1 min read
Th e economy is improving further in Germany, despite restrictions
Business confidence in Germany weakened last month, with coronavirus restrictions increasing. However, on Monday, a survey showed that in the month of February, the business confidence rose by far more than expected, hitting its highest level since October, as the industrial sector gave Europe’s largest economy a mighty boost, despite lockdown restrictions.

The Ifo institute stated that its business climate index had increased to 92.4, from an upwardly revised 90.3 in January. A Reuters poll of analysts pointed to a February reading of 90.5, a reading that surpassed even in the highest forecast in the poll.

Germany February Ifo Business Climate Index

  • February Ifo business climate index 92.4 vs 90.5 expected
  • Prior 90.1; revised to 90.3
  • Expectations 94.2 vs 91.7 expected
  • Prior 91.1; revised to 91.5
  • Current assessment 90.6 vs 89.1 expected
  • Prior 89.2
There was a slight delay in the release by the source, with modest beats across the board and expectations jumping by quite a bit, amid vaccine optimism and a more hopeful take on the economic outlook for later on in the year.
This just largely reaffirms the market sentiment at this time, and will do little to distract from the current narrative at play to start the week i.e. yields, yields, yields.

 

Comments by Ifo economist, Klaus Wohlrabe

  • German economy looking towards an upswing
  • Climate has improved in construction, retail and services
  • Especially pronounced in the industrial sector
  • Production plans have been revised upwards significantly
This has largely to do with more optimism on the vaccine front, as it bolsters the narrative that the economy should improve dramatically by the summer. That said, the risk of virus variants will still present some risk to that outlook.
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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