Business confidence in Germany declined unexpectedly in January, reaching its lowest level since September 2016, according to the results of the Munich Institute for Economic Research (Ifo). The data signal that companies are less optimistic about the outlook for the largest economy in Europe.
The index of the Institute dropped from 111 points in December 2016 to 109.8 points in January 2017, while the forecast of economists was for a slight increase in the indicator to 113 points.
The fall was mainly driven by a decline in expectations about future trading, which fell from 105.6 to 103.2. Assessments of current trading, in contrast, edged up from 116.6 to 116.9, though this was still slightly below consensus forecasts.
Sub-indices for the manufacturing, wholesaling and construction sectors all declined.
“German economy began the year with less confidence”, said Clemens Fustel, director of the institute Ifo. According to him, the companies expressed greater satisfaction with current business conditions, but are less optimistic about the next six months.