The mood in the German economy brightened further in April. The Ifo business climate rose by 0.4 points to 93.6 points compared to the previous month, as announced by the Ifo Institute in Munich. It is the sixth increase in the important economic barometer in a row. Analysts had expected an average improvement to 93.4 points. In detail, however, the results were mixed. Although the approximately 9,000 companies surveyed rated their future prospects better, the current economic situation was rated worse.
The business climate improved in industry and construction, but it deteriorated among service providers and in retail. “The concerns of German companies are easing, but the economy is lacking momentum,” commented Ifo President Clemens Fuest.
Bank economists commented on the survey results rather cautiously. “The German economy is still a long way from spring fever,” wrote Ulrich Kater, chief economist at Dekabank. Despite the improvement, corporate sentiment remains below average. In view of rising interest rates and a fragile global economy, a strong upswing is unlikely.
Thomas Gitzel, chief economist at VP Bank, was somewhat more positive. “Measured against what was originally to be feared, the German economy is doing extremely well.” The German economy came through the winter relatively unscathed, and energy prices have fallen noticeably in recent months. “But despite all the joy about the better than expected economic development, the economic traffic lights do not turn green.” Gitzel referred to the weak retail trade and the ailing construction industry.
