German business morale darkens on supply bottlenecks, COVID
German business morale deteriorated for the fifth month running in November as supply bottlenecks in manufacturing and a spike in coronavirus infections clouded the growth outlook for Europe’s largest economy, a survey showed on Wednesday.
The Ifo institute said its business climate index fell to 96.5 from 97.7 in October. A Reuters poll of analysts had pointed to a November reading of 96.6.
“Supply bottlenecks and the fourth wave of the coronavirus are challenging German companies,” Ifo President Clemens Fuest said.
Company executives were less satisfied with their current business situation while their expectations for the next six months also became more pessimistic, the survey showed.
The Ifo survey contrasted with a purchasing manager survey which had suggested on Tuesday that growth in Germany’s private sector picked up slightly in November despite persistent supply bottlenecks and record high inflation.
The German central bank warned on Monday that the economy could stagnate in the final quarter of this year as a lack of goods and labour as well as new restrictions to fight the pandemic might put an end to its fragile recovery.
Source: Reuters (Reporting by Michael Nienaber, editing by Emma Thomasson, Kirsti Knolle)