German business climate worsens for 5th consecutive month: ifo Institute

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BERLIN, Nov. 24 (Xinhua) -- "Sentiment in the German economy has taken a downward turn," the ifo Institute for Economic Research said on Wednesday, as its Business Climate Index fell for the fifth consecutive month to 96.5 points in November.

Due to supply bottlenecks and the ongoing fourth COVID-19 wave, the index declined across all industry sectors, as German companies were less satisfied with their current business situation and also increasingly pessimistic about the future.

In the service sector, sentiment deteriorated noticeably as the fourth COVID-19 wave "caused expectations to plunge especially in the tourism and hospitality industries," said Clemens Fuest, president of the ifo Institute.

Companies in the manufacturing sector "assessed their current business as considerably worse," while their expectations "brightened somewhat." However, supply bottlenecks in intermediate products and raw materials "still had a grip" on this sector, the ifo noted.

The Association of German Chambers of Industry and Commerce (DIHK) said on Tuesday that its survey of 3,200 German companies active abroad has found that more than half of them were experiencing problems in their supply chains or logistics, an increase of 14 percent compared to spring.

"Rising global demand is currently encountering insufficient production capacity and transport problems," said Volker Treier, head of foreign trade at DIHK. "Reasons for this are, for example, a lack of containers and freight capacity on ships, as well as production stoppages."

The Kiel Institute for the World Economy (IfW Kiel) saw some "positive indications in world trade" but also warned that there was "no sustained recovery in sight." China's export figures signaled a "slight upward trend for November," according to the Kiel Trade Indicator.

"Hopes are pinned on the period after the Chinese New Year in the first half of 2022. However, it is not yet clear whether and how quickly global trade will return to normal," said Vincent Stamer, head of Kiel Trade Indicator. Enditem

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