The Ifo business climate index for Germany's manufacturing sector fell to a three-year low in March
Despite the fact that overall business climate improved, the manufacturing sector remains a giant question mark as the 6.6 reading is the weakest posted since February 2016. It's no surprise that the sector that is helping to provide extra relief to the German economy is the services sector which showed a rebound from 21.3 in February to 26.0 in March.
The trade and construction sector also posted modest rebounds but the details of the report here basically shows the exact same sentiment that we saw in the PMI prints yesterday.
On top of that, Ifo also notes that the expectations component of the manufacturing sector fell to its lowest level since November 2012. With demand waning, it highlights that businesses aren't expecting things to get better in the coming months either.
The irony here is that Ifo only started accounting for the services sector in this particular report since April 2018. If they hadn't, the data release here would've probably contributed to more negativity in German economic sentiment over the past few months.
Talk about convenience, eh?
