German business morale fell unexpectedly in July on continuing supply chain worries and amid rising coronavirus infections, a survey showed today.
The Ifo institute said its business climate index fell to 100.8 from a revised figure of 101.7 in June.
A Reuters poll of analysts had pointed to a July reading of 102.1.
Shortages of materials are crimping output and pushing up prices at German industrial firms while the tourism and hospitality sectors fear a fourth wave of the coronavirus, Ifo economist Klaus Wohlrabe said today.
Wohlrabe said that some 64% of industrial firms have reported bottlenecks in the supply chain, while 60% of wholesalers and 42.5% of retailers also complain of shortages.
Even in the tourism and hospitality sectors, which were among the worst-hit by lockdowns, euphoria has ebbed with many fearing a fourth wave of the coronavirus, he added.
But Wohlrabe still expects the economy to grow by 1.3% in the second quarter, and by a further 3.6% in the third quarter.
