The business climate in Germany clouded over more than expected in August, which was partly due to the assessment of the situation and business expectations.
The ifo business climate index fell to 85.7 (July revised: 87.4) points. It was the fourth straight decline. Economists polled by Dow Jones Newswires had forecast a decline to 86.6. A preliminary figure of 87.3 points had been given for July.
The situation assessment index fell to 89.0 (revised: 91.4) points. Economists had forecast a decline to 90.0 points. 91.3 points had been reported provisionally for July. The index of business expectations fell to 82.6 (revised: 83.6) points. 83.4 points had been expected, based on a provisional July value of 83.5. “The dry spell in the German economy is getting longer,” the economic researchers commented on the result.
In manufacturing, the business climate index fell. In particular, companies were less satisfied with current business. The corresponding indicator slipped into negative territory for the first time since October 2020. Expectations remained noticeably pessimistic. Companies complained about fewer and fewer new orders.
In the service sector, the business climate cooled noticeably. The service providers were significantly less satisfied with the current business situation. They also expect a further downturn. “The weakness of the industry is also dragging down transport and logistics,” commented the ifo Institute.
In trading, the index also fell. Traders assessed their current situation much more negatively. The outlook also continued to darken. In construction, the business climate indicator continued its descent. Companies were noticeably less satisfied with current business. In addition, pessimism about the coming months became more and more widespread.
By Hans Bentzien
FRANKFURT (Dow Jones)