German business morale falls more than expected
By Benjamin Chiou
Date: Monday 25 Nov 2024
(Sharecast News) - Business morale in Germany worsened this month, with sentiment in both the struggling manufacturing sector and services industries taking a hit, according to the IFO Institute.
The IFO business climate Index, a monthly index based on the responses of around 9,000 private-sector firms, fell to 85.7 in November from 86.5 the month before, coming in shy of the 86.0 consensus forecast.
The index had temporarily rebounded in October after hitting a low of 85.4 in September, which tied its lowest reading in more than four years.
November's current assessment sub-index slipped to 84.3 from 85.7, while the expectations index edged lower to 87.2 from 87.3.
Within the manufacturing sector, companies were skeptical about the coming months as orders fell, with the current situation frequently described as difficult, the IFO said.
Meanwhile, companies in the services sector assessed the current situation as "significantly worse", with expectations turning more pessimistic.
There were also noticeable declines in morale in the trade and construction sectors.
According to Alexander Valentin, senior economist at Oxford Economics, the drop in sentiment overall mirrors the trend seen in other indicators which weakened following the US elections earlier this month.
"The fall in the current component was driven by services and construction while expectations worsened mainly in manufacturing, likely due to the anticipation of US tariffs and challenges to global trade flows," Valentin said.
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