German business sentiment improves but momentum slowing
By Michele Maatouk
Date: Thursday 24 Sep 2020
(Sharecast News) - German business sentiment continued to improve in September but the recovery is slowing, according to a survey released by the Ifo Institute on Thursday.
The business climate index edged up to 93.4 from a revised 92.5 in August, coming in just a touch below expectations of 93.8.
Meanwhile, the current situation index rose to 89.2 from 87.9, while the expectations index printed at 97.7 compared to 97.2 in August.
Ifo president Clement Fuest said: "The companies once again assessed their current situation as better than in the previous month. They also expect their business to recover further. The German economy is stabilising despite rising infection numbers."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said these were decent headlines, but the rebound is slowing.
"The headline was pushed higher by gains in both the current assessment index and in the expectations gauge, though note that the rebound in the latter is now stalling," he said.
"This is a small red flag, indicating that the recovery is now slowing, if not halting altogether in the face of renewed restrictions to combat the virus. That said, the overall message from these data remains positive. The recovery is now slowing, but it seems to be more robust compared to elsewhere in the euro area. As far as the details go, they support yesterday's message in from the PMIs of divergence between sectors. Confidence in manufacturing and construction rose further, while it fell in services, albeit only slightly."
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