German companies expect an uncomfortable autumn. A vaccine against the corona pandemic seems available, but the current shutdown is still affecting the business climate in Germany. The Ifo index fell again in November.
German companies expect an uncomfortable autumn
The second shutdown increases the uncertainty in German companies. Accordingly, the business climate has deteriorated for the second time in a row – despite the prospect of rapid vaccinations against the coronavirus. The Ifo business climate index fell in November to 90.7 points from 92.5 points in the previous month, as the Munich Institute announced. “The second corona wave interrupted the recovery of the German economy,” says Ifo President Clemens Fuest. The managers judged the outlook for their businesses to be much more pessimistic and their situation somewhat worse than recently. You can browse here for financial news.
The German economy had recently recovered after the Corona kink in the spring and grew by 8.5 percent in the third quarter. The economy is now threatened with a new setback due to the foreseeable extension of the shutdown into December. “Autumn will be uncomfortable for the German economy,” says Ifo expert Klaus Wohlrabe. “We assume that the gross domestic product will be slightly negative in the current fourth quarter.”
However, not all industries are equally affected:
- While the business climate in trade and services deteriorated noticeably, the mood in industry improved. Incoming orders there rose, albeit more slowly than in the previous month.
- According to the Ifo Institute, things are going “really well” for the consumer goods manufacturers. However, companies were still reluctant to make large investments.
- In the service sector, the mood collapsed, especially among hoteliers and restaurateurs, and retailers also reported that business was doing much less well.
- Construction companies rated their current situation somewhat better than in the previous month.