The mood among companies is once again worse.
(Photo: dpa)
Munich At the beginning of the second half of the year, the mood in the executive floors of the German economy clouded over again. The Ifo business climate fell in July to 87.3 points from 88.6 points in the previous month and thus for the third time in a row, as the Munich Ifo Institute announced on Tuesday in its survey of around 9,000 executives.
Experts surveyed by the Reuters news agency had only expected a drop to 88.0 points. “The situation in the German economy is getting darker,” said Ifo President Clemens Fuest. Companies were noticeably more dissatisfied with current business in particular. Expectations also dropped again.
“The weak phase of the German economy is being extended,” said the head of the Ifo survey, Klaus Wohlrabe, on Tuesday of the Reuters news agency in view of the renewed decline in the business climate index. Gross domestic product is expected to fall in the current third quarter after having roughly stagnated in the spring.
One reason for the misery is the continuing weakness of the industry. “The companies can process the existing orders better because the delivery bottlenecks are continuously decreasing,” said Wohlrabe. “But fewer new orders are coming.”
There are hardly any rays of hope in the industry. In the meantime, the mechanical engineering and electrical engineering sectors and the chemical industry have also been weakening for some time. Foreign demand is also rather meager. “No momentum is to be expected from the export side,” said the Ifo expert.
Construction industry more pessimistic than it has been since 2010
Things are looking particularly bad in the construction industry, which is suffering from rising interest and material costs. “The business climate there is worse than it has been since 2010,” said Wohlrabe. The picture is more mixed for the service providers. The IT sector is still going well, as is tourism. On the other hand, things look worse for the transport and logistics sector, which depends on industry drips.
The German economy shrank at the end of 2022 and beginning of 2023 compared to the previous quarter and has been in a so-called technical recession ever since.
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