German business confidence drops unexpectedly, survey shows

German Chancellor Angela Merkel, left, holds a bunch of flowers as a birthday present for a member of the cabinet during her arrival for the weekly cabinet meeting at the Chancellery in Berlin, Germany, Wednesday, Aug. 24, 2016. At right is German Minister for Economic Affairs and Energy Sigmar Gabriel. (AP Photo/Michael Sohn)

BERLIN — Business confidence in Germany, Europe's biggest economy, has dropped unexpectedly as managers' assessment of both their current and future situations darkened following Britain's decision to leave the European Union, a survey showed Thursday.

The Ifo institute's confidence index fell to 106.2 points for August from 108.3 in July. Economists had predicted a slight increase to 108.5.

The sharpest monthly decline in more than four years took the index to its lowest level since December 2014. It follows a much smaller decline in July immediately following Britain's vote to leave the EU.

The Ifo measured a drop in confidence in most sectors it surveyed, though not in construction and services.

Timo Wollmershaeuser, an economic expert with the Ifo, told n-tv television that the last two months' movement "taken together is a mirror image of the Brexit vote."

Economist Carsten Brzeski at ING-DiBa said the decline "suggests that German businesses have suddenly woken up to Brexit reality."

"It is not the first time that the Ifo reacts with a delay of one or two months to global events," he said, though he noted that the German economy remains — for now — in a "virtuous circle."

Official figures released this month showed that the German economy grew 0.4 percent in the second quarter compared with the previous three-month period — a slower pace than its 0.7 percent growth spurt in the first quarter, but double what economists had expected. Unemployment is low and growth has been increasingly fueled by domestic demand.

The Ifo's monthly survey is based on responses from around 7,000 companies in Germany. They are asked to assess their current situation and their outlook for the next six months.

You may also interested in

Rio Olympics over, final decision on Brazil president looms

Aug 24, 2016

After the party, the hangover: With the Rio Olympics fading into memory, Brazil returns to longstanding political divisions and prepares for a final Senate vote on whether to permanently oust its embattled President Dilma Rousseff

Asian stock markets mixed as investors wait for Fed cue

Aug 26, 2016

Asian stock markets were mixed Friday, with investors preferring to sit on the sidelines ahead of U.S. Federal Reserve Chairman Janet Yellen's speech for cues on the timing of the next policy rate hike

Asian stocks mixed ahead of US jobs data

Aug 31, 2016

Asian stocks are mixed Wednesday in listless trading ahead of jobs data later this week and continued anticipation of higher interest rates in the U.S. Japan's benchmark Nikkei 225 gained 0.8 percent to 16,857.07 in morning trading

Broaden News
Search

Manage The Numbers is the world’s fastest-growing finance news website, featuring the latest money and market news, along with in-depth analysis so you can make the best decision.

Contact us: sales@managethenumbers.com

Subscribe to our newsletter!

Name

Email