MNI BRIEF: Ifo Business Climate Down in January

The Ifo business climate indicator eased slightly in January to 90.1, just below market forecasts. Current conditions declined by 2.1 points to 89.2, coming in slightly weaker than expected. The Ifo Expectations index dropped 1.9 points to 91.1 in contrast to markets looking for an uptick.

Following eight months of successive gains, manufacturing business climate fell in January, mainly due to a decline of expectations, while the assessment of the current situation was better. The business climate indicator for the service sector saw a sharp, driven by a decrease of both current conditions and expectations. The report noted weaker orders, especially in the transport and logistics industry.

Meanwhile, business climate in trade plunged in January, showing the steepest fall since April 2020 for current conditions. Sentiment worsened across all retail segments. Similarly, business climate in the construction sector declined in January.