The sentiment in German companies has worsened again, industry has no orders

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Business sentiment in Germany has deteriorated again this month. The business climate index compiled by the Munich-based Ifo economic institute fell for the second month in a row, down to 85.4 points from 86.6 points in August. The institute’s assessment of the current situation and expectations for the coming months are also worse, it added.

The situation was confirmed by a regular survey

The data is based on a regular survey of about 9,000 entrepreneurs and managers of German companies. Although in August the institute initially reported that sentiment had worsened for the fourth month in a row, that would have meant that there was a decline for the fifth consecutive month in September. However, a revision showed that the index did not fall in May, only stagnated. This means that only in September did sentiment deteriorate for the fourth consecutive month.

The Business Situation Index, in which entrepreneurs and managers rate the current situation of their own business, fell two points to 84.4 points last month. The Expectations Index, in which entrepreneurs and managers assess the outlook for the economy and their own businesses over the next six months, fell to 86.3 points from 86.8 points.

Lack of investments

In the manufacturing sector, the index fell to its lowest level since June 2020. Businesses in this sector rate their current situation as significantly worse and are much more pessimistic about their expectations for the coming months.

“We see the problem particularly in the industrial sector. Industrial companies do not have enough orders, which is linked to weak exports to China and a lack of investment in Germany,” said Clemens Fuest, director of the institute. The mood has also worsened in services and retail. In contrast, the index increased in the construction sector. Even so, it remains in clear negative territory.

Source: Czech Press Office

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