German Ifo Business Climate Up in Dec; Beats Forecasts

DEC IFO BUSINESS CLIMATE INDEX 92.1; NOV 90.9

DEC IFO CURRENT CONDITIONS 91.3; NOV 90.0

DEC IFO EXPECTATIONS 92.8; NOV 91.8

• The Ifo business climate indicator ticked up to 92.1 in Dec, in contrast to markets looking for a small downtick (BBG: 90.0).
• Current conditions improved as well to 91.3, above market projections (expected 89.0)
• Expectations ticked up to 92.8 in Dec, slightly outperforming forecasts looking for an increase to 92.5.
• Companies were less sceptical about the coming six months and they were generally more satisfied with the current situation.
• However, the lockdown is hitting certain sectors particularly hard, such as tour operators, accommodation services and creative artists.
• The manufacturing sector held up well in Dec with current conditions rising to the highest level since Jan and expectations increased markedly as well.
• Meanwhile, service sector firm's assessment of the current situation improved, while the outlook was also less pessimistic, mainly due to positive developments in the transport and logistics sector.
• Trade business climate improved in Dec due to wholesalers serving the manufacturing sector, while the retail sector was more pessimistic due to the tightening of the lockdown.
• Business climate in the construction sector remained unchanged.