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GERMAN DATA: December IFO Weaker Than PMI, Deterioration Across Most Sectors

GERMAN DATA
Data BulletEurozoneGermanyCEEMEABulletMarketsFixed Income BulletsForeign Exchange Bullets

Germany's IFO Business Climate Index fell in December to its lowest value since May 2020, 84.7 (85.6 Nov), also coming in short of expectations of 85.5. The print appears even less optimistic than Monday's flash PMI release in indicating a deterioration across both services and manufacturing. Overall, the release underpins the narrative of ongoing weakness in the German economy. 

  • The main downside driver were future expectations, which fell to 84.4 (vs 87.5 cons; 87.0 prior), the lowest value since February. The current assessment declined to 85.1 (vs 84.0 cons; 84.3 prior).
  • Across sectors, manufacturing firms were less confident with the current stance - but mainly, their future outlook deteriorated in December. For services firms, the current assessment was slightly brighter than before, but expectations declined significantly. Hospitality firms are reporting decent Christmas business but transport and logistics services firms are concerned about conditions in the next months, IFO reports.
  • With also trade printing weaker than before, construction was the only sector seeing a minor uptick - although from a very low level.
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Germany's IFO Business Climate Index fell in December to its lowest value since May 2020, 84.7 (85.6 Nov), also coming in short of expectations of 85.5. The print appears even less optimistic than Monday's flash PMI release in indicating a deterioration across both services and manufacturing. Overall, the release underpins the narrative of ongoing weakness in the German economy. 

  • The main downside driver were future expectations, which fell to 84.4 (vs 87.5 cons; 87.0 prior), the lowest value since February. The current assessment declined to 85.1 (vs 84.0 cons; 84.3 prior).
  • Across sectors, manufacturing firms were less confident with the current stance - but mainly, their future outlook deteriorated in December. For services firms, the current assessment was slightly brighter than before, but expectations declined significantly. Hospitality firms are reporting decent Christmas business but transport and logistics services firms are concerned about conditions in the next months, IFO reports.
  • With also trade printing weaker than before, construction was the only sector seeing a minor uptick - although from a very low level.