Business sentiment in Germany worsened in June for the second month in a row, with weakness in the manufacturing sector leading to a bleaker outlook for the German economy.
The Ifo business-climate index declined to 88.5 in June from 91.5 in May, according to data from the Ifo Institute published Monday.
The reading missed expectations of 90.5 according to economists polled by The Wall Street Journal.
“Expectations were markedly pessimistic and companies’ assessments of their current situations were worse,” Clemens Fuest, president of the Ifo Institute, said.
The index assessing the expectations for the next six months tumbled to 83.6 in June from 88.3 in May, and the indicator gauging current business conditions also fell, to 93.7 from 94.8, the survey said.
In manufacturing, the business climate deteriorated substantially, while business expectations also fell significantly, declining to their lowest level since November 2022, the survey said.
“The weakness in the manufacturing sector is steering the German economy into turbulent waters,” Fuest said.
Elsewhere, there were also declines in the climate indexes for the services, trade and construction sectors, Ifo said.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.