"Positive indicators point to a sustained upswing" TV viewers know the ifo Institute mainly from the news and in connection with the word monster "business climate index".
That's right. But we also deal with various economic and financial policy issues. For example, tax policy, environmental policy, education policy or foreign trade.
How much psychology and how many hard figures are there in the business climate index?
I would rather speak of future expectations than psychology. We ask companies what their expectations are for the next six months and how business is currently going. As far as current business is concerned, hard figures are probably the basis, but expectations are certainly also about psychology, for example whether companies are more optimistic or pessimistic.
Are there companies that make decisions based on this index?
You can assume that companies use all the information available to them, including the business climate index. But not just the index, of course.
First a sluggish economy, then corona. Was the lockdown really necessary?
You have to differentiate between government-ordered closures, closures due to a lack of demand and voluntary closures. Overall, however, I have no reason to claim that the lockdown measures in Germany were excessive.
However, the business climate index is now sending out positive signals again.
The economic slump has taken a V-shaped course. At the beginning of the lockdown, there was a steep downward trend, followed by a steep upward trend after the lockdown ended. However, you have to be careful when interpreting the trend. The recovery is probably not as good as it looks. For example, we had certain catch-up effects immediately after the restart in June. This means that orders that were placed before the lockdown were only processed afterwards. The second is the future forecasts, which can only be positive. If you are in the cellar, things can only go up. The third and fourth quarters will show whether this is the case.
In other words, the question is whether the upturn will be sustainable?
There are indeed positive indicators. Truck mileage is already almost as high as it was before the lockdown. And electricity consumption, which had fallen significantly during the coronavirus crisis, is approaching the previous year's level again.
Can't a sustainable recovery be achieved without further restrictions?
No. Figures from the USA prove this. There, a comparison was made between states that opened up more quickly and those that took more consistent measures. It was expected that the states with early waiver of restrictions would also recover more quickly. This was not the case. Consumers here and there remained cautious in their behavior. Unfortunately, there are no such figures for Germany.
Interview: Heinz Käsinger
