German business confidence edges down: survey

Confidence among German businesses eroded slightly in September, a regular survey published Monday found, reflecting uncertainty ahead of a general election on Sunday that has left Chancellor Angela Merkel facing tricky coalition talks.

The Munich-based Ifo institute’s closely-watched business confidence index fell to 115.2 points this month, a 0.7-point drop compared with August and short of predictions from analysts surveyed by Factset.

“Companies were less satisfied with both their current business situation and their short-term outlook than in August,” Ifo chief Clemens Fuest said.

“Germany’s economy nevertheless goes into the new legislative period with a strong tailwind,” he added.

Confidence among businesses, consumers and investors has been high over the summer, recent surveys have shown.

This was a reflection of strong economic growth in the first six months of the year and the dissipation of fears about the strong showing of populist parties in a number of European elections recently.

Looking to different sectors surveyed by Ifo, both the manufacturing and wholesale industries reported a dampening of sentiment in September compared with a month earlier.

But retailers’ outlook improved this month and confidence among construction companies hit a new record.

The September Ifo reading “suggests the economy can’t accelerate much further” beyond the 0.7 percent growth achieved between January and March and the 0.6 percent in April to June, Pictet bank economist Frederic Ducrozet tweeted.