By Hans Bentzien
FRANKFURT (Dow Jones) – The mood on the top floors of the German economy deteriorated much more than expected in April due to the measures taken to contain the corona pandemic. The Ifo business climate index dropped to 74.3 (revised in March: 85.9) points, the lowest level in the series dating back to 2005. The economists surveyed by Dow Jones Newswires had forecast a drop to 80.0 points. A score of 86.1 points was originally reported for March. “The corona crisis hits the German economy with full force,” commented the economic researchers.
The index for assessing the current situation of the companies surveyed dropped to 79.5 (revised 92.9) points, the lowest level since July 2009. Economists had expected 80.8 points. For the time being, 93.0 points had been reported for March. The business expectations index fell to an all-time low of 69.4 (revised 79.5) counters. The economists surveyed had expected a decline to 77.0. For the time being, 79.7 points had been reported for March.
The Ifo Index is the most important German economic barometer and is considered a reliable indicator for the development of the next six months.
In the manufacturing sector, the business climate index fell to the lowest level since March 2009. The current business situation of industrial companies deteriorated dramatically. The expectations were marked by massive pessimism. The expectation indicator fell to a historical low. According to Ifo, the demand for industrial products has plummeted.
The business climate indicator fell to a low in the service sector. The service providers have never assessed their situation as badly as in April. There was also unprecedented pessimism about expectations.
The downturn in the business climate indicator continued in retail. The judgments on the current business situation deteriorated to a record low. The negative record of March in expectations was beaten again.
The index has also never fallen so sharply in the construction industry. The same applies to the indicator of the current situation and expectations. Most of the construction companies were still satisfied with their current situation.
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DJG / hab / apo
(END) Dow Jones Newswires
April 24, 2020 04:17 ET (08:17 GMT)