The mood in the German economy deteriorated unexpectedly in June. The Ifo business climate fell to 88.6 points from 89.3 points in the previous month, for the second time in a row, the Munich-based Ifo Institute announced on Monday. Experts surveyed by Reuters, however, had expected an increase to 89.7 points.
The Ifo index is based on a survey of around 9,000 managers. Companies remain skeptical about their current business situation and their prospects for the coming months are less favorable than recently. There is a lack of orders in large parts of the economy and private demand is still not picking up. “The German economy is struggling to overcome stagnation,” said Ifo President Clemens Fuest.
Other experts share this assessment. “There is no upturn in Germany,” says Jens-Oliver Niklasch, analyst at LBBW. It is unclear where the hoped-for growth spurt for the coming year will come from.
The situation in the individual sectors is quite different, according to the Ifo Institute. While the mood in the services sector is improving, the climate in trade is deteriorating. In the manufacturing sector, companies are worried about the falling order backlog. In the construction sector, the index rose slightly because expectations for the future are less pessimistic.