ZURICH (MaceNews) – A decline in business expectations led to a drop in overall business sentiment, according to the latest report from Germany’s IFO Institute.
The Business Climate Index fell to 100.8 in July from a revised 101.7 (101.8) in June, coming in below the median result of 102.3 in an Econoday survey of economists’ forecasts.
The result indicates “sentiment in the Germany economy has clouded over,” IFO President Clemens Fuest said in a statement.
A decline in the expectations index to 101.2 from 103.7 (104.0) the previous month weighed on the overall number on “supply bottlenecks and concerns over newly rising infection numbers” in Germany, Fuest pointed out.
At the same time, current conditions improved to 100.4 from 99.7 (99.6) in June, according to the report.
Sentiment in July by sector:
- Manufacturing: “Fell due to a distinct decrease in optimism in companies’ expectations. That
indicator declined for the fourth time in a row. In contrast, companies’ assessments of the current situation rose to their highest level since August 2018.”
- Services: “Although service providers were more satisfied with their ongoing business, their view of the coming months is much less optimistic.”
- Trade: “The cautiously optimistic expectations of the previous months declined. In contrast, the indicator for the current situation rose somewhat. More and more companies in retail are also reporting supply bottlenecks.”
- Construction: “The business climate improved. Companies were more satisfied with their current situation, and the expectations indicator rose for the third time in a row.”
The next release date for the Business Climate Index is August 25 at 10:00 am Central European Time