German Ifo Business Morale At 7-Month Low

(RTTNews) - German business confidence deteriorated to a seven-month low in June as companies were markedly pessimistic about future and their assessment about current situation worsened, a monthly survey conducted by the ifo institute showed on Monday.

The business climate index slid more-than-expected to 88.5 in June from 91.5 in May. The reading was seen at 90.7. This was the lowest level since last November.

At 93.7, the current situation index also hit a seven-month low in June from 94.8 a month ago. Nonetheless, the score was slightly above economists' forecast of 93.5.

The expectations index posted 83.6 compared to 88.3 in the previous month. This was the weakest reading seen so far this year.

Ifo President Clemens Fuest said, "The weakness in the manufacturing sector is steering the German economy into turbulent waters."

The survey suggested that the rebound of the German economy has ended before it ever really began, ING economist Carsten Brzeski said. The economy faces new growth concerns with several short and long-term challenges, the economist noted.

Business confidence deteriorated substantially in the manufacturing sector. The current situation was assessed to be worse and expectations posted a sharp decline to reach the lowest level since November 2022.

Business confidence weakened in the service sector in June. Companies were less satisfied with their current situation and their expectations were more pessimistic. The negative developments weighed heavily on transport and logistics.

In trade, business sentiment deteriorated as companies were somewhat less satisfied with their current business, while their expectations improved slightly.

The business climate in construction also weakened in June. The survey showed that contractors were somewhat less satisfied with their current situation and their expectations deteriorated.