The FINANCIAL — German business confidence fell sharply in June, and by more than expected, as companies trimmed their expectations amid concerns about a Greek debt default and exit from the currency area, according to Nasdaq.
The Ifo think tank said on June that its business climate index dropped to 107.4 in June from 108.5 in May, its lowest level since February. Economists surveyed by The Wall Street Journal had expected a decline to 108.0.
“The outlook for the German economy is muted,” Ifo President Hans-Werner Sinn said.
The Ifo index continues to point to solid economic growth this year, but indicates that the upswing is losing momentum.
Other forward-looking indicators have been sending mixed signals about Europe’s largest economy. The ZEW indicator of economic expectations slumped to a seven-month low in June, but a purchasing managers survey published Tuesday was surprisingly upbeat. Markit’s composite purchasing managers index for Germany–a measure of activity in the manufacturing and services sectors-jumped to 54.0 in June from 52.6 in May, a two-month high.
Every month, the Ifo think tank asks about 7,000 companies in manufacturing, construction, wholesaling and retailing about their business expectations for the next six months and their assessment of the current situation.