German business mood takes turn for the worse

23rd March 2005, Comments 0 comments

23 March 2005, MUNICH - The mood of Germany's business sector dropped sharply over the past month, with companies more cautious about both current and future prospects, the Munich-based ifo-Institut reported on Wednesday.

23 March 2005

MUNICH - The mood of Germany's business sector dropped sharply over the past month, with companies more cautious about both current and future prospects, the Munich-based ifo-Institut reported on Wednesday.

The ifo-Institut index for March dropped to 94 points, from a reading of 95.4 points a month earlier, in a development surprising most analysts who had been expecting the index to level off.

Institute president Hans-Werner Sinn said companies now see a drop-off in the pace of Germany's economic growth as a cause for their increased caution.

"In particular, the hoped-for upswing in demand for capital investment goods has not yet gotten underway," Sinn said.

Companies now regard their current business position much less favourably and were also more pessimistic regarding the future.

The one buoyant area remained companies' views about their export prospects, said ifo-Institut, one of Germany's six leading independent economic research think tanks.

But above all it is the retail sector which had become less optimistic about the future, the institute said.

DPA

Subject: German news

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