Financial News: German Business Confidence Weakens In November

German Business Confidence Weakens In November

11/25/2024 - 05:08:00 (RTTNews)

(RTTNews) - German business sentiment softened in November on a notable deterioration in current conditions as economic struggles deepened, survey results from ifo Institute showed on Monday.

The business climate index fell to 85.7 in November from 86.5 in the previous month. The score was expected to fall moderately to 86.0.

At 84.3, the current situation index dropped to the lowest since July 2020. The score was forecast to fall to 85.5 from 85.7 in October.

At the same time, the expectations index registered 87.2 in November, slightly down from 87.3 a month ago. The expected reading was 87.0.

"The German economy is floundering," ifo Institute President Clemens Fuest said. Capital Economics' economist Franziska Palmas said the German economy will continue to struggle in the months ahead.

The economist expects the German GDP to shrink again in the fourth quarter and expand just 0.5 percent in 2025.

The survey today showed that the business climate in manufacturing worsened as companies were somewhat skeptical again about the coming months. By contrast, they were slightly more satisfied about the status quo. Nevertheless, the current situation is frequently described as difficult.

In the service sector, business confidence declined notably in November. Companies assessed the current situation as significantly worse and their expectations were more pessimistic.

On the other hand, business sentiment in trade improved again. Companies assessed their current situation as better. In addition, expectations were less pessimistic, both for retail and wholesale. However, sentiment remained a long way off from being positive, ifo said.

In construction, the business climate worsened noticeably. Companies were less satisfied with current business and expectations were more skeptical again.

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