Ifo: German business confidence uneven accross sectors

German business confidence declined in June from 110.4 to 109.9 points compared to May and reached a 6 month low, according to the monthly Ifo business confidence index.

The research, which is based on a survey of 7000 executives in the manufacturing industry, wholesale and construction, remains nevertheless above its long term average of 100 points.

The results showed significant differences by sector, with the decline being most pronounced in manufacturing, where the assessment reached a 6 month low.

However, the survey also showed improvement, most notably for the wholesale sector, where business confidence grew to a two year high.

The construction sector also reflected growing optimism, with business confidence increasing for the first time in four months.

The results come one day after the publication of the latest Markit PMI index for Europe, as published in Investment Europe yesterday, which reports a slight weakening of growth in Germany, with GDP growing at 0.7% for the second quarter of this year.

According to Hans-Werner Sinn, president of the Ifo institute, key reasons for the decline in business confidence are concerns about the implications of the political crises in Iraq and the Ukraine.

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