Germany: Business confidence trends down in June, signaling a continuation of moderating momentum
June 25, 2018
At the close of the second quarter, data continued to suggest that the German economy is moderating; business confidence in June inched down from the prior month’s seasonally-adjusted 102.3 (previously reported: 102.2) to 101.8 on the back of less upbeat sentiment regarding current business conditions compared to the prior month. However, business expectations were unchanged. Although June’s result was the lowest print since May 2017, the sentiment indicator remained above the 100-point mark that separates optimism from pessimism among private sector firms.
A sector-by-sector picture showed an across-the-board deterioration, as all sectors recorded lower confidence levels. Manufacturers were less upbeat about the current business situation, whereas their expectations remained somewhat optimistic. Among firms in the services sector, confidence dropped due to less rosy views on the current business situation and business expectations. Construction firms also recorded a drop in sentiment levels due to the current business situation; business expectations remained fairly upbeat, however. The biggest drop in confidence was recorded in the trade sector—chiefly due to the retailing subsector—as companies scaled back their assessment of the current business situation, and business expectations turned pessimistic for the first time since February 2015.
Germany Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 3.6% in 2018, which is up 0.1 percentage points from last month’s forecast. In 2019, the panel sees investment growth moderating to 3.2%.
Author: Jan Lammersen, Economist