German business sentiment worsens in September
GERMAN business morale deteriorated in September, falling for the fifth month in a row, a survey showed on Monday (Sep 25).
The Ifo institute said its business climate index stood at 85.7 versus a forecast of 85.2, according to analysts polled by Reuters.
This is a decline from a revised 85.8 in August.
“The German economy is treading water,” Ifo president Clemens Fuest said.
Companies were less satisfied than in the previous month with their current business situation. However, their pessimism regarding the coming months dissipated slightly.
The mood was especially grim in the construction sector where the confidence index slumped to its lowest level since 2009, as higher interest rates and soaring costs for materials take their toll on the housing market.
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Germany’s crucial manufacturing sector, hit hard by weaker demand from abroad and elevated energy costs, also stayed pessimistic as order books shrank further.
The Ifo reading is the latest in a series of gloomy data for the German economy, which sank into a recession at the start of the year and stagnated in the second quarter.
The European Commission earlier this month said it now expects the German economy to contract by 0.4 per cent this year, compared to a previous forecast of 0.2 per cent growth.
The International Monetary Fund has forecast that Germany will be the only major advanced economy to shrink in 2023. REUTERS, AFP
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