German business sentiment slipped in September, albeit from a high level, as companies lowered their outlook, according to the Ifo Institute’s monthly survey, which was conducted ahead of Sunday’s general election.
The German think tank said Monday that its business climate index fell to 115.2 points from 115.9 points in August. Economists polled by The Wall Street Journal had forecast an unchanged result.
But with indicator still “way above” its long-term average, Europe’s largest economy is entering the new legislative period with “a strong tailwind,” said Clemens Fuest, the Ifo Institute’s president.
But the Ifo survey does not reflect Sunday’s election result, which shows a steep drop in support for Chancellor Angela Merkel’s conservative alliance and a surge in anti-immigrant sentiment. Lacking a majority in parliament, Ms. Merkel will need to build a governing coalition, and many political observers warn that the process could drag on for weeks, possibly months.
The Ifo survey of about 7,000 companies shows that German companies were less upbeat about their current situation and also scaled back their short-term outlook.
Source: Dow Jones