The first real test of the mood among German industry and trade since the Volkswagen emissions scandal has found that managers were less fazed by it than expected.
The IFO think tank’s business climate index fell in October to 108.2 from 108.5 in September – its lowest level since July – but analysts had predicted a sharper decline.
The survey is being seen as a sign of the German economy’s resilience.
“The (IFO) current figures indicate that the VW scandal seems to have had no decisive impact on the car industry. We see that the index even rose in the automobile sector. The index for October fell slightly, but it actually improved regarding the outlook for the future,” said IFO economist Klaus Wohlrabe.
Germany’s economy has benefitted from solid consumer demand fuelled by record-low unemployment.
However despite the relatively upbeat business mood other hard data paint a different picture.
Manufacturing orders, industrial production and exports have all slumped.
A separate survey of investor confidence and economic sentiment showed a decline.
Many economists are less optimistic about future growth and the government has cut its forecast for this year to 1.7 percent from an earlier prediction of 1.8 percent.