Business sentiment in Germany deteriorated again in September, but the pace of decline slowed down significantly compared to the previous four months. The value of the index, which is compiled by the Ifo economic institute, fell to 85.7 points from the revised August value of 85.8 points.
The lowest assessment index
The business sentiment index, which has been falling for five months in a row, was only lower in September and November 2022. With a score of 88.7, the current situation assessment index is the lowest in the past three years. The value of this index fell by 0.3 points in September compared to August. In contrast, the expectations index rose to 82.9 points in September from 82.7 points in August.
“Pessimism for the coming months has declined slightly. However, the German economy continues to overshoot the mark,” the institute said.
In manufacturing, the business sentiment index improved slightly. “Businesses were slightly more satisfied with the current state of business. Expectations have deteriorated only slightly and thus remain pessimistic,” Ifo said.
Index across sectors
In business, the business sentiment index improved, which also led to a reduction in pessimism about future expectations. By contrast, the business sentiment indicator in the construction sector fell to its worst level since January 2009. “The outlook for the coming months remains extremely pessimistic,” said the Ifo Institute.
Germany, which is struggling with the negative effects of the war in Ukraine, fell into a technical recession at the beginning of this year. This is usually defined as two consecutive quarters of economic contraction. According to the Federal Statistical Office, the economy stabilized in the second quarter as gross domestic product (GDP) remained unchanged compared with the previous three months.
Source Czech Press Office
