- Raiffeisen Schweiz
Business confidence in Germany declined for a fifth consecutive month in September, as the largest economy of the single currency area is likely to face GDP growth problems for the second quarter in a row. In April-June German economy decreased 0.2%, by falling below the Eurozone's overall zero increase. Business climate index in the country, calculated by the Ifo Institute, lost ground to reach 104.7 points this month from the year-to-date high of 111.3 points, reached earlier in February. The indicator is based on survey of 7,000 largest companies in Germany, meaning that it can have a proper and clear insight into the real economic situation in the country. Among risks for business climate in the strongest economy of the region and the whole Eurozone, exports mention economic sanctions from Russia amid Ukrainian conflict, as they closed doors for many European exporters to fast-growing consumer market in Russia.
Besides business activity, new orders placed at manufacturers fell in September, while investor confidence dropped to the lowest in nine months and manufacturing PMI hit 15-month low. On the other hand, industrial production increased; however, it could be explained by upcoming new school year. Some German producers with tight links to Russian market have already announced a series of spending cuts, including job losses and decreased working hours.
© Dukascopy Bank SA