German business climate in March sees biggest decline in almost 30 years: ifo

Source: Xinhua| 2020-03-19 22:20:44|Editor: xuxin
Video PlayerClose

BERLIN, March 19 (Xinhua) -- The ifo business climate index slumped from 96.0 points in February to 87.7 points in March, the German ifo Institute announced on Thursday.

This was the largest decline since 1991 and the lowest rate since August 2009 of the close-watched economic barometer of German companies, according to the institute.

"The mood in German companies has worsened massively," said Clemens Fuest, president of the ifo Institute, noting that the German economy "plunges into recession."

The business climate index had fallen in all German industrial sectors, "in some cases quite significantly," the institute noted. Many German companies had already announced production cutbacks and lower export expectations.

The monthly index is reflecting the economic sentiment of around 9,000 German company executives. Because the ifo index was published one week ahead of schedule, the preliminary evaluation included only 90 percent of the usual number of responses.

In the German manufacturing sector, the business climate index fell to its lowest level since 2009. The institute noted that the strong decline in business expectations was "historically unique" in the 70-year history of the industry survey.

In the service sector, the business climate indicator had seen the biggest decline since recording in this sector began in 2005, both in terms of companies' assessment of the current situation and business expectations.

And in the retail sector, the business climate indicator "collapsed," the ifo Institute noted. Both wholesale and retail had been hit equally hard.

Only in the construction industry had the index fallen comparatively "moderately," according to the institute. The current situation was still assessed as "very good." However, the outlook had "worsened considerably."