Germany’s business sentiment drops in November, reversing October’s recovery
Date
11/26/2024 7:35:35 AM
(MENAFN) German business sentiment declined in November, reversing the slight recovery observed in October, according to the latest report from the ifo Institute. The ifo Business Climate Index, a key indicator of sentiment across various sectors such as manufacturing, services, trade, and construction, dropped to 85.7 points in November, down from 86.5 points in October. This decline reflects a deterioration in business confidence, particularly due to worsening assessments of the current economic situation, signaling that companies are becoming more cautious amid continued challenges in the German economy.
The drop in sentiment was largely attributed to more negative views on the current situation, with business expectations across many sectors showing signs of weakening. The German manufacturing sector, in particular, saw its business sentiment worsen, falling to minus 21.9 in November from minus 20.6 in October. Manufacturers expressed concerns about a lack of new orders and voiced skepticism regarding future demand, which contributed to the more pessimistic outlook for the sector.
The service sector also experienced a significant decline in business sentiment, with its index dropping from 0.1 in October to minus 3.6 in November. This marked a notable shift towards pessimism, as service companies reported increasingly negative expectations for the months ahead. Similarly, the construction sector saw its business climate index fall sharply to minus 28.5 from minus 25.7, reflecting a growing sense of dissatisfaction and uncertainty among construction firms about the near-term outlook.
On a slightly more positive note, business sentiment in the trade sector improved, with its index rising from minus 29.4 in October to minus 26.6 in November. This improvement was driven by a more favorable view of the current situation, as companies in the retail and wholesale sectors reported less pessimism compared to previous months. Despite the improvement, however, sentiment in the trade sector remained firmly in negative territory, highlighting the ongoing difficulties faced by businesses in this area. Overall, the latest data from the ifo Institute paints a picture of cautious business sentiment, with continued uncertainty about the future of the German economy.
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