FRANKFURT – German managers again expressed optimism about the coming six months but said the present situation has worsened, a stance that has reheated recession warnings for Europe’s largest economy.
The headline business climate index for Germany compiled by the country’s Ifo economics institute advanced to 91.1 points – a fifth consecutive increase – which beat the downwardly revised 90.1 reading from January but fell short of the 91.2 market estimate.
This was second month in a row that the headline reading was below the consensus forecast, and it was the second straight time the current conditions component of the index declined unexpectedly, with this month's reading falling to 93.9, well short of the 95.0 estimate and 94.1 in January.
In other words, all gains for the headline number again came thanks to the rise in the expectations component, a measure covering the next six months. It grew to 88.5 to outpace both the 88.4 estimate and 86.4 in January.
“The German economy is gradually working its way out of a period of weakness,” Ifo said.
Analysts say recession dangers remain
The report on business morale followed Tuesday’s release of German data pointing to a largely improved mood among investors and purchasing managers.
Purchasing managers were more cautious, according to pollster S&P Global, with those in the service sector offering a brighter outlook as the mood among respondents in manufacturing soured.
“After the PMI and the ZEW, it is now the latest Ifo index reading which points to an improving outlook for the German economy,” ING’s Carsten Brzeski noted, adding that the Ifo reading has returned to levels last seen in the summer.
“Today’s Ifo index reading is good news and fits into a picture of gradually improving confidence,” Brzeski said. “At the same time, however, there is no reason to start partying. The second consecutive drop in current assessments suggests that the economy could see another quarter of economic contraction.”
Ifo itself echoed this sentiment after the release of Wednesday’s data, with one of its economists telling Reuters that while the German economy will not be able to avoid a recession, it will be mild.
Following a busy couple of days for German data, Capital Economics summed up the situation in a note: “Overall, the mixed messages from the surveys suggest that it might be touch and go whether the German economy avoids a second successive contraction this quarter.”
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case 'RequestMoreMessages': request_more_messages(msg.data); break;
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function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
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socket.send(msg_string); }
postMessage({action: 'PublisherChannelJoined' });
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function session_static_info(msg) {
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logging_interval = setTimeout(session_info_interval,logging_interval_time);
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connect_to_assigned_server();
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postMessage({ action: 'ConnectedToAssigned' });
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case 'reconnect': postMessage({ action: 'VisibleConsole',console_string: "Reconnected" }); break;
case 'reload': postMessage({ action: 'Reload' }); break;
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case 'player_log_request':
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case 'new_latest_news':
case 'delete_report':
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case 'add_ref_doc':
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case 'BroadcasterStopped':
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case 'added_cme_commentary':
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case 'more_messages':
case 'matched_messages':
pass_straight_to_post_message(data);
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case 'server_ping':
case 'reconnect':
case 'disconnect':
break;
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postMessage({ action: 'VisibleConsole',console_string: "LS Socket Error" + event.type });
console.log(event);
postMessage({ action: 'LSSocketConnectionError' });
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socket.onclose = function(event) {};
socket.onmessage = function(event) {};
socket.onerror = function(event) {};
socket.close(1000);
console.log('Socket Closed');
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function pass_straight_to_post_message(data) {
data.action = data.type;
postMessage(data);
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data_array.username = data.username;
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session_info_interval();
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function application_refresh_start(data) {
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session_info.user_agent = data.user_agent;
session_info.browser_version = data.browser_version;
session_info.cookies_enabled = data.cookies_enabled;
session_info.platform = data.platform;
session_info.player_version = data.player_version;
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session_info.session_email = data.session_email;
session_info.remote_ip = data.remote_ip;
session_info.php_session_id = data.php_session_id;
session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
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data_array.php_session_id = session_info.php_session_id;
data_array.webrtc_protocol = '';
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function update_session_info(data) {
var data_array = {};
var msg_string = '';
var current_date = new Date();
var current_time = current_date.getTime();
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session_info.mean_opinion_score = data.mean_opinion_score;
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- Headline reading rises but falls short of estimate
- Improved outlook again drives gains
- Current conditions measure slips unexpectedly
- Overall increase follows better PMIs and investor mood
- Analysts say data suggests minor German recession
By Eric Culp, European Editor
LiveSquawk News
@EricCulpLS
22 February 2023 | 09:55 GMT
FRANKFURT – German managers again expressed optimism about the coming six months but said the present situation has worsened, a stance that has reheated recession warnings for Europe’s largest economy.
The headline business climate index for Germany compiled by the country’s Ifo economics institute advanced to 91.1 points – a fifth consecutive increase – which beat the downwardly revised 90.1 reading from January but fell short of the 91.2 market estimate.
This was second month in a row that the headline reading was below the consensus forecast, and it was the second straight time the current conditions component of the index declined unexpectedly, with this month's reading falling to 93.9, well short of the 95.0 estimate and 94.1 in January.
In other words, all gains for the headline number again came thanks to the rise in the expectations component, a measure covering the next six months. It grew to 88.5 to outpace both the 88.4 estimate and 86.4 in January.
“The German economy is gradually working its way out of a period of weakness,” Ifo said.
Analysts say recession dangers remain
The report on business morale followed Tuesday’s release of German data pointing to a largely improved mood among investors and purchasing managers.
Germany’s ZEW economic thinktank said its latest monthly survey showed that financial market experts had expressed significantly more optimism about Europe’s largest economy.
Purchasing managers were more cautious, according to pollster S&P Global, with those in the service sector offering a brighter outlook as the mood among respondents in manufacturing soured.
“After the PMI and the ZEW, it is now the latest Ifo index reading which points to an improving outlook for the German economy,” ING’s Carsten Brzeski noted, adding that the Ifo reading has returned to levels last seen in the summer.
“Today’s Ifo index reading is good news and fits into a picture of gradually improving confidence,” Brzeski said. “At the same time, however, there is no reason to start partying. The second consecutive drop in current assessments suggests that the economy could see another quarter of economic contraction.”
As the German economy shrank in the final quarter of 2022, a further decline this quarter would put the country in a technical recession.
Ifo itself echoed this sentiment after the release of Wednesday’s data, with one of its economists telling Reuters that while the German economy will not be able to avoid a recession, it will be mild.
Following a busy couple of days for German data, Capital Economics summed up the situation in a note: “Overall, the mixed messages from the surveys suggest that it might be touch and go whether the German economy avoids a second successive contraction this quarter.”