German business confidence fell further in August, a closely watched survey showed, as Europe's biggest economy struggles to emerge from a weak period.
The Ifo Institute's confidence barometer, based on a survey of about 9,000 companies, fell to 86.6 points from 87 points in July, AFP reported.
"Sentiment among companies in Germany is on a downward trend," Ifo president Clemens Füst said after the indicator's fourth straight decline.
"The German economy is increasingly in crisis," Fuest said.
According to the survey, companies are both less optimistic about the current economic environment and more pessimistic about their future prospects.
Confidence among companies in the manufacturing sector, in particular, "fell significantly".
According to Ifo, businesses in the crucial sector "once again reported a decline in orders", with the lull pushing expectations down to their lowest since February.
The hoped-for recovery failed to materialize as the German economy contracted in 2023.
According to preliminary data, production unexpectedly fell again in the second quarter of the year, with the economy contracting by 0.1%.
"The business climate is and remains much gloomier than in previous phases when GDP was stagnant," said Fritzi Keller-Gaib, chief economist at public lender KfW.
The weak performance can be attributed to the multiplication of global crises and "transformational challenges" that are causing uncertainty among businesses, Koehler-Gaib said.
She said a "moderate recovery" was still possible as consumers regained some of their purchasing power after recent high inflation. | BGNES
