What is the German IFO Business Climate Index?

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Market importance: High importance.

Meaning: A leading economic indicator for Germany’s business sector.

Release time: The fourth week of the survey month, 10 a.m. Frankfurt time.

Frequency: Monthly.

Coverage period: The just-ended month.

The German IFO Business Climate Index shows a high positive correlation with the U.S. Institute for Supply Management’s manufacturing report, and in recent years the ISM data has lagged behind the IFO index by half a year.

The IFO Business Climate Index is compiled by the IFO Institute for Economic Research and is an important leading indicator for observing Germany’s economic situation.

IFO is the English acronym for the Registered Association of the German Institute for Economic Information, founded in Munich in 1949. It is a non-profit, independent economic research institute, and is known as one of the German government’s think tanks.

The German IFO Business Climate Index surveys various industrial sectors every month, including manufacturing, construction, and retail. The number of entrepreneurs covered by each survey is more than 7,000. The index is compiled based on the assessment of the current situation and the short-term plans and expectations for the next six months.

Because the IFO Business Climate Index is published monthly, surveys the opinions of businesses on the future, and covers a wide range of sectors, it has a high reference value for economic trend forecasting.

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