Because the confidence index in Germany is weak
German Ifo Index in October: Supply chain problems as well as damaging the manufacturing sector are starting to affect trade as well. The comment by Aniello Dell'Anno, economist in the studies and research department of Intesa Sanpaolo
Ifo: the best is behind us, growth goes towards the trend.
The German Ifo confidence index fell again in October to 97.7 from a previous 98.9. The component of expectations fell mainly, passing to 95.4 from a previous 97.4. The assessment on the current situation only slightly declined, to 100.1 from 100.4 previously. The presence of supply-side bottlenecks continues to penalize the manufacturing sector and slow the post-Covid recovery.
The sectoral cross-section shows a decline in the climate of confidence spread to almost all sectors. In manufacturing, morale dropped to 17.2 from a previous 20. In services, confidence dropped to 16.5 from 19.1. In distribution, morale dropped by 4.5 points to 8.6, also due to the decline in confidence in retail trade -2.1 from 2. Construction, up to 12.9 points from the previous 11.1, they show a stable morale on a recovery trend.
The October survey showed that supply chain problems, although not worsening, are starting to affect trade as well as damaging the manufacturing sector (particularly the automotive sector).
In the summer months, the Ifo index averaged 99.8 thanks to the improvement in the current conditions component, suggesting a growth in German GDP in the third quarter of around 2.2% qoq. Currently, our GDP growth forecast of 2.7% in 2021 appears to be subject to downside risks precisely due to the weak entry of the synthetic index in the fall quarter.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-lindice-di-fiducia-in-germania-e-fiacco/ on Mon, 25 Oct 2021 11:29:04 +0000.