Germany: Business sentiment drops to historic low in April
German business confidence nosedived to a record-low in April, with the ifo Business Climate Index dropping to 74.3 from a revised 85.9 in March (previously reported: 86.1). The drop reflected considerable deteriorations in the assessment of the current climate and expectations. Clemens Fuest, president of the ifo Institute, added: “Sentiment at German companies is catastrophic. […]. The coronavirus crisis is striking the German economy with full fury.”
Sector-level data revealed that all sectors are in a state of shock. Within the manufacturing sector, sentiment fell to its lowest level in over a decade with both expectations and views on the current situation extremely pessimistic, as the global lockdown has diminished demand for industrial goods. The services sector has hitherto been relatively strong; however, it is also feeling the pinch from the health crisis: Assessments of the current situation and business expectations were the poorest on record among services firms. Expectations of companies in the trade sector were also the most negative on record, while sentiment in the construction sector fell at the quickest pace ever.