The ifo Heatmap

The ifo Business Climate Index for Germany is the main result from the ifo Business Survey. It is considered as one of the most important early indicators for the German economy. The ifo Business Cycle Clock is an expressive presentation of the ifo Business Climate Index with the phases “Boom”, “Slowdown”, “Crisis”, and “Recovery” (see Section 3.3). Each phase depends on the current business situation and the business expectations. “Boom”: a positive business situation and expectations. “Slowdown”: a positive business situation accompanied by negative expectations. “Crisis’: both a negative business situation and negative expectations. “Recovery”: a negative business situation but expected improvement.

However, the ifo Business Climate and other results from the ifo Business Survey are not only reported on the level of the overall economy but also for numerous industries from manufacturing, construction, trade, and the service sector. These industries cover around 75 percent of the German gross value added. Therefore, the ifo Heatmap is intended to provide a compact overview of economic developments in various industries over several years (Wohlrabe and Wollmershäuser 2021). It is based on the four phases of the ifo Business Cycle Clock described above. These phases are represented by the colors light red (Recovery), dark red (Boom), light blue (Slowdown), and dark blue (Crisis). For each month, all industries shown in the ifo Heatmap get assigned one of these four colors.