Germany: Business confidence falls to lowest level in over a year
August 24, 2011
Business confidence fell in August, as escalating sovereign debt woes are curbing consumption within the Eurozone and German businesses fear another global slump. The business confidence index published by the Ifo Institute fell from 112.9 points in July to 108.7 points in August and marked the lowest level in business sentiment since June 2010. The reading undershot market expectations that the index would fall to 111.0 points. As a result of the August outturn, the index now sits 2.4 points below the confidence level registered in the same month last year. The August deterioration showed businesses' being less upbeat about their current business situation. In addition, business prospects for the next 12 months fell to the lowest level since October 2009, reflecting firms' increasing concerns of another global recession. Since late July, Germany's benchmark DAX Index has fallen almost 25%, on fears that a global slowdown in economic activity will dent export demand.
Author: Ricardo Aceves, Senior Economist