The President of the Ifo Institute, Clemens Fuest, comments on the results of the latest business surveys in August 2023. The mood in German boardrooms has deteriorated further. In August, the ifo Business Climate Index fell to 85.7 points, down from 87.4 points in July. This is the fourth decline in a row. Assessments of the current business situation fell to their lowest level since August 2020. In addition, companies are taking a more pessimistic view of the coming months. The dry spell in the German economy is lengthening.
The business climate index fell in the manufacturing sector. In particular, companies were less satisfied with current business. The corresponding indicator slipped into negative territory for the first time since October 2020. Expectations remained noticeably pessimistic. Companies complained about fewer and fewer new orders.
The business climate in the service sector cooled noticeably. Service providers were significantly less satisfied with the current business situation. They also expect a further deterioration. The weakness of industry is also dragging down transport and logistics.
The index also fell in the retail sector. Retailers assessed their current situation much more negatively. The outlook also darkened further.
In the construction sector, the business climate indicator continued its downward slide. Companies were noticeably less satisfied with current business. In addition, pessimism about the coming months is becoming increasingly widespread.