Clemens Fuest, President of the ifo Institute, comments on the results of the current economic surveys in August 2023.
The mood in the German executive suites has deteriorated further. The ifo business climate index fell to 85.7 points in August, after 87.4 points1 in July. This is the fourth decline in a row. The assessment of the current business situation fell to its lowest level since August 2020. Companies are also more pessimistic about the coming months. The German economy’s dry spell is extending.
The business climate index has fallen in the manufacturing sector. Companies were particularly 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.
In the service sector, the business climate has cooled noticeably. The service providers were significantly less satisfied with the current business situation. They also expect further clouding. The weakness of the industry is also dragging down transport and logistics.
The index also fell in trading. The traders assessed their current situation significantly more negatively. The outlook also continued to darken.
In the construction industry, the business climate indicator continued its downward trend. Companies were noticeably more dissatisfied with current business. In addition, pessimism for the coming months is becoming increasingly widespread.