ifoGeschäftsklima

ifoGeschäftsklima, or the ifo Business Climate Index, is a monthly economic indicator published by the ifo Institute for Economic Research (ifo Institute) in Munich. It summarizes German business sentiment by surveying thousands of firms across sectors and aggregating their assessments of current conditions and expected development.

Methodology: The survey asks respondents to rate their present business situation and their expectations for the next six months on a five-point scale. The responses are transformed into two sub-indices, which are combined into a single climate index. A higher value signals a more favorable climate.

Scale and interpretation: The index is typically centered around a neutral level of about 100. Readings above 100 indicate a positive assessment and expectations, while readings below 100 point to a cautious or deteriorating outlook. The publication also provides sub-indices for current conditions and for expectations.

Publication and use: The ifoGeschäftsklima is released monthly and is widely regarded as a leading indicator of German economic activity. It is cited by policymakers, analysts, and media as a gauge of business sentiment and potential turning points, often ahead of official data releases.

Notes: The index reflects sentiment and survey responses rather than realized demand in the short term. As with other sentiment indicators, it may be revised or interpreted alongside other indicators and sector breakdowns to understand the broader economic context.