Germany: Business confidence falls in October
Business confidence fell to 92.7 in October from September’s 93.2. As a result, the index remained below the 100-threshold, separating pessimism from optimism among businesses. The print marked the first fall in five months.
The drop came on the back of a deterioration in firms’ views of the future economic situation, while views on the current situation improved slightly. Looking at the sector level, manufacturing confidence returned to optimism for the first time in over a year. However, sentiment regarding the current climate in the services sector deteriorated, likely due to renewed restrictive measures to curb the spread of Covid-19.
Commenting on the data, Carsten Brzeski, global head of macro, stated:
“The first drop in the Ifo business sentiment index since the lifting of lockdown measures adds to growth concerns for the last few months of the year. […]. At face value, today’s Ifo index is not weak enough to fear another collapse of the economy but as all of Europe is in the second wave of the virus, today’s Ifo index definitely marks the end of the rebound and the start of double-dip fears.”