German business confidence deteriorates a little less than expected - Ifo
German business confidence deteriorated a little less than expected in June, according to a widely-followed survey released on Monday.
The Ifo business climate index fell to 101.8 from a revised 102.3 in May, which was slightly ahead of expectations for a reading of 101.7.
Meanwhile the current assessment index declined to 105.1 from 106.1 the month before, missing expectations for a reading of 105.6 and the expectations index held steady at 98.6 in June, versus a forecast of 98.0.
The sub-index for manufacturing printed at 23.8 this month comparted to 24.1 in May, while the construction index fell to 19.4 from 20.4 and the trade index was down at 11.3 from 14.5. The service sector index dropped to 25.9 in June from 27.1 in May.
Clemens Fuest, president of the Ifo Institute, said: "Companies were less satisfied with their current business situation. Their business expectations, by contrast, remained slightly optimistic. The tailwind enjoyed by the German economy is calming down."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said this was another poor headline, although the details were slightly more upbeat.
"The decline in the expectations index appears to have been halted, while the main driver of the headline dip was the decline in the current assessment index. This is good news in so far as goes that the expectations index is the main leading sub-index in this survey. Across sectors, the sub-indices fell across the board, but the declines were marginal in all cases," he said.
Jennifer McKeown, chief European economist at Capital Economics, noted that the current conditions index is still at a very high level.
"What’s more, the expectations index registered an encouraging increase. Altogether, the composite BCI points to annual GDP growth remaining close to Q1’s pace of 2.3%. This is broadly consistent with the message from the composite PMI that quarterly growth has picked up from Q1’s disappointing 0.3% to 0.4% or so.
"Of course, there is a lot of uncertainty ahead and it is likely that the threat of protectionist measures will continue to weigh on sentiment for a while, especially if car exports move back into focus."