Munich (dpa) – The mood in the German economy deteriorated again in October due to ongoing problems in global trade.
The Ifo business climate, Germany’s most important economic barometer, fell compared to the previous month by 1.2 points to 97, 7 points, as announced by the Ifo Institute in Munich. It is the fourth decline in a row. Analysts had expected on average a somewhat more moderate decline to 98 .0 points.
“Delivery problems are causing problems for companies,” said Ifo President Clemens Fuest. Capacity utilization in industry is falling. “Sand in the gears of the German economy is holding back the recovery.” Above all, the companies surveyed assessed the prospects as less favorable. Once again, the ongoing problems in international trade in goods, most of which can be traced back to the corona pandemic, weighed on the mood.
In the manufacturing sector, companies are somewhat less satisfied with their current business development, according to the Ifo. In addition, expectations clouded over further. As a result of the delivery bottlenecks, capacity utilization fell by 2.1 percentage points to 84 .7 percent.
In the service sector, the business climate deteriorated again after the recovery in the previous month. The companies were much less optimistic about the coming months. However, they rated their current situation somewhat better, according to the Ifo researchers.
In retail, the index has fallen significantly, it said. Dealers are noticeably less satisfied with their current business. “In addition, pessimism will continue to grow with a view to the coming months. Here, too, delivery bottlenecks put a strain on the mood, ”emphasized the Ifo. In the construction industry, however, the business climate has improved again. Companies assessed their current situation somewhat better. In addition, the expectation index has risen for the sixth time in a row.
The deterioration is basically no surprise, as other survey indicators such as the Markit purchasing managers’ indices had already indicated. The clouding over affected all areas examined with the exception of the construction industry. Current business alone was rated somewhat better among the service providers. This is likely to be a consequence of lower corona restrictions.
“The corona crisis has turned into a scarcity crisis,” explained Thomas Gitzel, chief economist at VP Bank. The material shortages weighed heavily on the industry. In addition, there would be price turbulence on the energy markets. “The massive increases in gas and electricity prices are becoming an economic risk,” Gitzel warned. After presumably continued growth in summer, the risk of stagnation in autumn is high, said ING chief economist Carsten Brzeski. It is increasingly unlikely that German economic output (GDP) will reach its pre-crisis level this year.