By Ed Frankl
Business sentiment in Germany weakened in August for the fourth month in a row, and by more than expected, as the economic outlook turns gloomier in Europe’s largest economy, according to a survey of companies.
The Ifo business-climate index declined to 85.7 in August from 87.4 in July, data from the Ifo Institute said Friday, missing expectations of 86.6 by economists polled by The Wall Street Journal. The reading was the lowest level since October 2022.
“Companies are increasingly pessimistic about the months ahead,” said Clemens Fuest, president of the Ifo Institute.
Ifo’s indicator gauging current conditions tumbled to 89.0 from 91.4 in July, the lowest level since August 2020.
Meanwhile, its index assessing expectations for the next six months also ticked down, to 82.6 in August from 83.6 in the prior month, the survey said.
In manufacturing, expectations remained starkly pessimistic, Ifo said, with companies suffering from declining new orders.
The business-climate index was also weaker on month in Ifo’s other tracked sectors–services, trade and construction–with the outlook turning gloomier in all three.
The survey comes after Germany’s economy was confirmed to have stalled in the second quarter of the year, after contracting in the first quarter of 2023 and the last of 2022.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
Write to Ed Frankl at [email protected]
Read the full article here
