German business confidence fell for a second month in December, hitting a seven-month low as firms reported weak orders and disappointing Christmas sales.
FRANKFURT: German business sentiment fell to its lowest level in seven months in December, a survey showed.
The Ifo institute’s confidence barometer dropped to 87.6 points from 88 points in November, its second straight monthly drop.
“The year is ending without any sense of optimism,” said Ifo president Clemens Fuest.
Sentiment in the crucial manufacturing sector slipped as companies reported worse expectations for the future.
“The number of new orders declined, and companies are planning to scale back production,” the institute said.
Morale also fell in trade and the service sector, with retailers reporting disappointing Christmas sales.
The survey suggests the long-awaited recovery in the German economy still has not materialised.
“The fiscal stimulus not yet having a meaningful impact,” said Franziska Palmas, senior Europe economist from Capital Economics.
The German economy is struggling to emerge from a long downturn, hit by a manufacturing slump and increasing competition.
After meagre growth this year, the economy is expected to pick up speed in 2026 on the back of government spending.
Economists are growing more gloomy about the prospects for next year, however.
Leading institutes last week cut their 2026 growth forecasts to between 0.8% and 1% expansion.
The government is forecasting growth of 1.3% in 2026.
