German Business Confidence Falls to Four-Month Low in January

Confidence among German executives unexpectedly weakened in January, signalling a gloomier outlook for the next six months, survey results have indicated.

The Munich-based Ifo Institute’s business confidence indicator, which is based on approximately 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing, slipped to 109.8 in January from 111 in December, it said on Wednesday. That was lowest reading since September. Economists had expected a slight increase in the index to 111.3, according to a survey on investing.com.

“Companies expressed greater satisfaction with their current business situation, but are less optimistic about their six-month business outlook,” Clemens Fuest, head of the Ifo Institute, said. “The German economy made a less confident start to the year.”

German business managers’ assessments of the current situation, however, improved to a reading of 116.9 from 116.7 in December, while expectations for six months from now fell to 103.2, the lowest reading since August, and down from 105.5 in December.