Business confidence in Germany fell in March as the war in Iran postponed any hope of a recovery in the German economy, according to Ifo (Germany’s economic research institute).
The business confidence index for Germany as a whole fell to 86.4 points in March, against 88.4 points in February.
Companies in Germany are more pessimistic about what will happen in the next six months, but maintain their assessment of their current situation.
Uncertainty among companies has increased considerably.
“The war in Iran has frozen any hope of recovery for now”, commented the president of the Ifo institute, Clemens Fuest, when presenting the confidence survey.
Business confidence worsened again in the industrial sector because the expectations of industrial companies fell sharply and the assessment of their current situation is less favorable.
Industries that use a lot of energy to produce are the most affected. In the services sector, business confidence worsened considerably, especially in tourism and the logistics industry.
In trade, business confidence fell due to a significantly more pessimistic outlook.
The expectations of wholesale and retail traders fell sharply due to the German population’s fear of an increase in inflation. In construction, business confidence worsened as expectations fell with an intensity not seen since March 2022.
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