German business morale was down for the first time in five months in March as companies in Europe’s largest economy worry about the effects of the Ukraine crisis.
According to surveys of 7,000 firms carried out by the Munich-based Ifo economic think tank there are fears a standoff with Russia and further sanctions over Ukraine would hurt businesses in a key market.
Germany receives more than a third of its gas and oil from Russia and over 6,000 German companies are active there.
Orders are already down as the value of the rouble falls.
Lemken, a German manufacturer of ploughs and other farm machinery, has seen a big drop-off in orders from Russia, its second-biggest export market after France, in recent weeks as a sliding rouble raises their sale price.
German generic drugmaker Stada Arzneimittel on Monday scrapped its 2014 outlook, blaming a slide in the Russian and Ukrainian currencies against the euro and uncertainty over business prospects in Russia, its second-biggest market.
Germany’s “wise men” council of economic advisers said last week that the Ukraine crisis was the biggest threat to growth globally, and especially in Germany, because of Russia’s importance as an energy exporter.