The Ifo Business Climate Index for Germany fell one point to 101.0 in December 2018, the lowest reading since December 2016 and well below market expectations of 101.8, amid global trade tensions and Brexit uncertainty. The gauge of current conditions declined to 104.7 from 105.5 in November and the business expectations sub-index dropped to 97.3 from 98.7. Sentiment deteriorated among manufacturers (14.8 vs 17.7 in November), service providers (26.8 vs 30.7), and wholesalers & retailers (9.1 vs 9.8); while morale among constructors was unchanged (at 29.6). Business Confidence in Germany averaged 98.12 Index Points from 1991 until 2018, reaching an all time high of 109.80 Index Points in January of 1991 and a record low of 80.20 Index Points in March of 2009.
Business Confidence in Germany is expected to be 102.70 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Business Confidence in Germany to stand at 103.20 in 12 months time. In the long-term, the Germany Ifo Business Climate Index is projected to trend around 100.00 Index Points in 2020, according to our econometric models.