Business confidence in Germany dropped for the sixth month in a row, a closely-watched survey showed today.
This comes amid growing indications the financial crisis is taking an increasing toll on Europe's largest economy.
Munich's Ifo institute said its key business climate figure dropped to 100 in October from 101.4 in September.
Economists had been predicting a slight increase to 101.6.
Ifo president Hans-Werner Sinn said even though businesses reported that their expectations for the next six months remained unchanged at 93.2 points, their assessment of their current situation dropped sharply from 110.3 points in September to 107.3 in October.
"The clouds over the German economy are darkening," Sinn said.
Germany has been doing better than other debt-burdened European countries such as Spain and Italy, but has lost momentum as the debt troubles on its doorstep have weighed on economic confidence.
Germany's economy, which was worth a little under €2.6 trillion ($3.4 trillion) last year, in comparison with the US's $12 trillion, has seen two consecutive years of robust growth. Its economy expanded by 4.2% in 2010 and 3% last year.
But the Economy Ministry last week cut its growth forecast for 2013 to 1% from 1.6%, though increased this year's outlook slightly from 0.7% to 0.8%.
The economy grew 0.3% in the second quarter and the ministry said indicators point to "further moderate growth" in the third quarter as well.
Economists warned that the Ifo survey indicates businesses have growing concerns about the economy and is "clear evidence that recessionary risks in the German economy are increasing."
Germany's export-driven economy has managed to make up for weakening support from other European Union nations, several of which are in recession, with growth elsewhere including to Russia and China. It is now, however, feeling not only the problems of the European Union but also elsewhere, economists said.
The Ifo index is based on a survey of 2,500 businesses about their views on how the economy is doing and how they see things in the future.
