Another weak IFO survey. The manufacturing sector remains particularly soft, offsetting what was a modest bounce on the (resilient) services side of things. The IFO clock moved further towards recession territory. While it might not yet be formally in this quadrant, the scale of the decline over the past year suggests we’re closer to, if not already in, a technical slump.
The survey data still continues to paint a rather bleak picture for German industry with the expectations component taking a renewed step lower in June and while current conditions were a shade better than expected together this marked a new low point in this leg of the cycle for the overall climate index.
The picture for German manufacturing continues to look rather bleak judging by the April IFO survey, with the modest improvement on the services side masking an even sharper deterioration in trade and industry. This leaves the business cycle clock looking even gloomier, albeit the relative resilience of current conditions keeping us well clear of recessionary territory.