German Industrial Confidence Hits Seven-Month Low

By Agence France-Presse German industrial confidence took another severe battering this month, data showed on Aug. 28, suggesting the weak upturn in the euro zone's biggest economy may have already come to an end. The business climate index for western Germany, calculated by the Ifo economics research institute, fell to 88.8 points in August from 89.9 in July, the institute said. It was the third month in a row that the index has fallen, bringing the barometer to its lowest level since February, and "signals that the upturn may have come to an end, at least temporarily," said Ifo President Hans-Werner Sinn. Economists had been expecting the Ifo index to fall only slightly to 89.4 points this month. Ifo said companies were feeling less confident about both their current situation and the outlook for the next six months. "As in previous months, the deterioration in the overall index is primarily attributable to unfavorable news in the manufacturing sector," Ifo explained. At the same time, confidence in the construction sector remained stable, while confidence in the retail and wholesale sectors fell again after showing a tentative improvement in July, Ifo said. For its monthly survey, Ifo polls around 7,000 companies about their assessment of current business and their expectations for the next six months. A breakdown of the data showed that the current sentiment sub-index fell to 77.3 points in August from 77.9 points in July. And the expectations sub-index plunged to 100.8 points in August from 102.5 points in July. Things also were looking pretty gloomy in eastern Germany, where the business climate index slipped to 99.1 points in August from 99.6 points in July. Copyright Agence France-Presse, 2002