German business confidence dropped in May according to the Ifo economics
institute at the University of Munich.
The Ifo Business Climate Index for industry and trade in Germany
based on a survey of about 7,000 executives, fell to 110.4
points in May from 111.2 points last month. Assessments of the current business
situation were no longer as favourable as in April. Companies are also less
optimistic about future business developments. A lull was seen in the German
economy in May.
In manufacturing the business climate index fell slightly, but remained at a
high level. Although assessments of the current business situation improved
marginally, manufacturers are slightly less optimistic about future business
developments. Manufacturers continue to expect stronger demand for exports.
In wholesaling the business climate index fell markedly, after April’s sharp
increase. While assessments of the current business situation were clearly less
favourable, assessments of the business outlook deteriorated only marginally. In
retailing the business climate also clouded over. Retailers were once again
slightly less satisfied with their current business situation. For the first
time in six months they were also somewhat pessimistic on balance about future
In construction the business climate index also declined slightly. Contractors
were somewhat less satisfied with their current business situation than in
April. The six-month business outlook also continued to deteriorate.
The Ifo Business Climate for the German service sector
based on 2,500 responses deteriorated to 21.4
balance points in May from 22.1 in April. Assessments of the current business
situation were slightly less favourable than last month, but remain at a high
level. Assessments of the business outlook, by contrast, were somewhat more
optimistic. Service providers still plan to recruit additional staff.