German CEO Sentiment Plummets to Near Pandemic Lows, Survey โคReveals
berlin, Germany – Sentiment among German corporate leaders has sharply deteriorated, with a key index โคhitting its lowest level since May 2020, according โฃtoโค a survey released today by the Ifo Institute. The Ifo โBusiness Climate Index for executives fell to 87.7 in July, down โfrom 91.5 in June, signaling growingโ pessimism about the outlook for Europe’s largest economy.
The dramatic decline reflects mounting โคconcerns over rising energy costs,โ persistent supply chain disruptions, and weakening global demand, threatening to further stall Germany’s economic recovery. The downturn โimpactsโค businesses across sectors, โขwith particular anxiety centered โon export-oriented โคindustries vulnerable to a potential global โฃrecession. This shift inโ CEO outlook could translate into reduced investment and hiring, exacerbating existing economic headwinds.
The โฃIfo survey, which polled approximately 900 executives, revealed a significant drop in both current business assessment โand expectationsโค for the coming months. Executives expressed increased dissatisfaction with their current business situation, and their outlookโ for the โnext six months was markedly more pessimistic.
“The โคGerman economyโ is increasingly feeling the strain of the war in โคUkraine,” said Klaus Wohlrabe, โhead of surveysโ at theโข Ifo Institute. “The rising energy prices are a majorโฃ burden for companies, and the uncertainty aboutโ future developments โis weighing on theirโ investment decisions.”
Specifically, the index for โmanufacturing fell to 86.8 from 91.5,while the index forโ servicesโ droppedโ to 88.5 from 92.7. Constructionโ was the only sector to show a slight betterment, with its indexโ rising to 94.8 from 94.3.
The survey underscores the growing challengesโ facing the German โgovernment asโข itโ attempts to navigate the economic fallout from the war โinโ ukraine and the ongoing energyโข crisis. Recent governmentโค measures aimed at easing the burden โขon businesses and consumers, such asโ energy โฃprice caps and financial aidโค packages,โ appear to be having limited impact on CEO sentiment.โข Further policy interventions โขmay be necessary to prevent a deeper economic downturn.