German business confidence dips for second consecutive month

International

BERLIN (AP) — German business confidence has declined for the second consecutive month as concerns about lingering effects of the coronavirus pandemic and supply bottlenecks cloud companies’ outlook, a closely watched survey showed Wednesday.

The Ifo institute said its confidence index for Europe’s biggest economy dropped to 99.4 points in August from 100.7 in July. While executives’ assessment of their current situation improved, their outlook for the next six months was significantly worse.

“Concerns are growing in the hospitality and tourism sectors in particular,” Ifo said. “Supply bottlenecks for intermediate products in manufacturing and worries about rising infection numbers are putting a strain on the economy.”

On Tuesday, official statistics showed that the German economy grew by 1.6% between April and June compared with the previous quarter, a slightly better showing than initially reported. This year’s second quarter saw coronavirus infections flare up again and then decline to a very low level, prompting authorities to relax many restrictions, while the country’s vaccination campaign picked up speed.

At the same time, though, the economy was hit by supply chain problems including disruption caused by a ship blocking the Suez Canal and delays in the production and delivery of microchips.

Germany’s central bank, the Bundesbank, said this week it expects the economy to grow “significantly more strongly” over the summer as a result of loosened pandemic restrictions. New infections are now rising steadily, powered by the delta variant, but new lockdown measures aren’t expected.

The Ifo survey is based on monthly responses from about 9,000 companies across the German business spectrum.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

video

More Video

Don't Miss

Trending Stories

More Top News

WTRF 7News Twitter