Election causes German business climate index to fall in September

The Ifo business climate index for industry and trade in Germany fell unexpectedly by 0.7 points in September due to the German parliamentary election, the Munich-based research institute Ifo reported Monday.

According to the economic think tank, the index moved slightly from 115.9 points in August to 115.2 points this month. Analysts had instead forecasted a slight rise of 0.1 point for the ongoing month.

Companies were less satisfied with both their current business situation and their short-term outlook than in August, Ifo reported.

Business climate indexes in manufacturing and wholesaling fell, while the index in retailing and construction rose.

"Germany's economy nevertheless goes into the new legislative period with a strong tailwind," Ifo President Clemens Fuest commented.

Clemens noted that the business climate index remains way above its long-term average of 102.1 points.

Ifo business climate index, considered the most important barometer for the German economy, is based on about 7,000 monthly survey responses from firms in the manufacturing, construction, wholesale and retail sectors.

(ASIA PACIFIC DAILY)