‘Catastrophic’ German business morale hits historic low

FRANKFURT AM MAIN (AFP) – German business confidence plummeted to a record low in April as firms fret over the coronavirus fallout, a closely-watched survey said yesterday, describing morale as “catastrophic”.

The Ifo institute’s monthly business climate index tumbled to 74.3 points, down from March’s 85.9 points.

“This is the lowest value ever recorded, and never before has the index fallen so drastically,” Ifo chief Clemens Fuest said in a statement.

“Companies have never been so pessimistic about the coming months.”

The index, based on a survey of 9,000 firms, has been around since 1991 but only started including the services sector in 2005.

The coronavirus pandemic has battered the global economy, bringing massive restrictions to everyday life that have left many businesses struggling to survive.

Export champion Germany is bracing for a painful recession, with experts predicting Europe’s top economy will shrink by about five per cent this year.

Looking in detail at the Ifo survey, the mood was especially bleak in manufacturing, trade and the services sector. Construction companies – which have been able to carry on working in some cases – were less negative, the survey found.

Like other countries worldwide, Germany has closed shops, restaurants and schools to curb the deadly outbreak.

Millions of people have been told to stay home and companies have put hundreds of thousands of workers on reduced hours to stay afloat.