German business confidence fell for the fifth month in a row in September as Europe’s debt crisis continues to hurt the continent’s largest economy.
The closely monitored IFO index dipped again as demand for German exports dropped due to the problems in the wider eurozone. Growth is sluggish and recession looms.
Gernot Nerb from the IFO institute said: “German industry exports more than half its total exports to country’s outside the eurozone. In Southern Europe countries are in recession and are spending less money on German products. There are still significant investment demands, but Germany is unable to gain access to it because of the current situation.”
The IFO is a leading indicator as to which direction the German economy will take.
The less than optimistic figures suggest the European Central Bank’s plan to buy bonds from weak eurozone states has failed to convince business that the worst of the financial turbulence has passed.