German business confidence weakened for the fourth consecutive month in October to hit a six-month low as supply bottlenecks weighed heavily on expectations, survey results from the ifo institute showed on Monday.
The business confidence index fell more than expected to 97.7 in October from 98.9 in September. The expected level for this month was 97.9.
The current situation indicator came in at 100.1, down from 100.4 a month ago.
Supply problems are giving businesses headaches, said ifo head Clemens Fuest.
“The fourth successive monthly fall in the ifo Business Climate Index provides more evidence – if it were needed – that supply side disruption is causing the German economy to slow sharply and suggests that the problems are extending beyond manufacturing,” Andrew Kenningham, an economist at Capital Economics, said.
The economist expects the economy to do no more than tread water in the last three months of the year.
In manufacturing, the business climate index fell once again. Companies were somewhat less satisfied with their current business and their expectations were also clouding further.
In the service sector, the business climate worsened again after a recovery in the previous month. Companies were considerably less optimistic about the coming months.
However, their assessments of the current business situation were slightly improved.
In trade, business confidence weakened considerably in October. Businesses were notably less satisfied with their current situation and were more pessimistic about the coming months.
Supply bottlenecks were weighing on sentiment.
In construction, the business climate improved further in October.
Companies’ assessments of their current situation were a little better.
Moreover, the expectations index rose for the sixth consecutive time.