Germany's Ifo economic institute is changing its business climate indicator from April to rebase the index and include responses from the services sector in its calculations, Ifo documents seen by Reuters show. The changes will see the index reading for March change from the previous reading of 114.7 to 103.2 under the new methodology, under which the index base year will change to 2015 from 2005.
The changes will take effect from the April business climate index, due for release on April 24, the documents showed. Ifo surveys some 7,000 firms each month to produce its business climate index, which fell for a second straight month in March and hit its lowest level in nearly a year, as managers became more concerned about the rising threat of protectionism.
Given the growing importance of the services sector in Germany, this would be included in the new methodology, the Ifo documents showed. Services, which account for about 60 percent of German gross domestic product, were not previously included when calculating the headline index. It was instead based on manufacturing, construction, wholesaling and retailing.
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