The firms are queried as to The balance value of the current business situation is the difference in percentage shares of the responses "good" and "poor"; the balance value of the expectations is the difference in percentage shares of the responses "more favorable" and "less favorable".
To calculate the business climate index value, the transformed balances are normalized to the average of the year 2015.
[2] As an indicator of economic activity, the Business Climate Index is meant to supplement data from the official statistics, over which it has the advantage of being more frequently compiled and more rapidly accessible (GDP, for example, is only released quarterly and published with a delay of ca.
The particular importance of the Ifo Business Climate Index is forecasting turning points in economic growth.
A cyclical turning point is reliably indicated following the "three-times rule", that is movement in a particular direction three months in succession.