German businesses are increasingly worried about the impact of the eurozone crisis, a survey suggests.
The business climate had worsened in the past month, according to the Ifo index of business sentiment, which fell to its lowest level since March 2010. The drop in expectations for the six months ahead was particularly marked in the monthly survey of 7,000 businesses. The data adds to concern that Germany, the eurozone’s engine of growth, is feeling the effects of the debt crisis.
Manufacturers in particular were far more cautious about the future, especially over future demand for their goods from abroad.
However they, along with retailers, said the current situation had improved in June compared with the previous month, although the reading was still well down on the figures throughout last year.
Looking forward, retailers were no longer as pessimistic about the next six months, and construction firms said the situation had brightened slightly. This accords more with Germany’s central bank, which this month revised up its forecast for the whole of 2012 to growth of 1%. The German economy grew by 0.5% in the first three months of the year, while the eurozone as a whole contracted by 0.1%.