German business sentiment dropped sharply in October, confirming Europe’s largest economy is now mired in the eurozone debt crisis.
The Ifo economic think-tank’s business climate index, based on a monthly survey of some seven thousand German firms fell for the sixth straight month to its lowest in more than two and a half years.
Ifo economist Kai Carstensen said: “Companies are realising more and more that the euro crisis is not over yet. There are still a lot of uncertainties. For example investments are being postponed and that has an impact on practically the whole German economy.”
Around Europe, the latest surveys of company purchasing managers also showed a worsening situation.
In October eurozone businesses suffered their worst month since emerging from the last recession more than three years ago.
As a result they cut more jobs to reduce costs.
The dominant services sector remained stagnant despite firms lowering their prices for the 11th straight month.