What is the Ifo Business Climate Survey?
The Ifo Business Climate Survey is a monthly measure of German business activity.
How Does the Ifo Business Climate Survey Work?
The Ifo Business Climate Survey incorporates over 5,000 monthly survey responses from a variety of companies. The survey asks companies about their opinions regarding current business conditions and their expectations about future conditions in the next six months. The responses are weighted according to the importance of the industry. Respondents rate the business situation as satisfactory, good, or poor.
The index value can vary from -100 (which means all respondents believe business conditions are poor and expect them to become worse) to +100 (which means all respondents believe business conditions are good and expect them to become better).
The Ifo Institute calculates the index. It is part of the CESifo Group, which includes the Center for Economic Studies, and the CESifo GmbH (Munich Society for the Promotion of Economic Research). Ifo stands for Information and Forschung (research). It was founded in 1949.
Why Does the Ifo Business Climate Survey Matter?
The Ifo Business Climate Survey is used as a barometer of the German economy. As the largest economy in the European Union, Germany by extension can be a reflection of the health of the EU economy.