German Business Confidence Drops Due to Increase in COVID-19 Cases

German business confidence declined in August for the second month in a row, according to a survey published on Wednesday, August 25, as business expectations became more pessimistic about the coming months in Europe’s largest economy due to an increase in COVID-19 infections and supply bottlenecks.

The Ifo institute said its business climate index fell to 99.4 from a downwardly revised reading of 100.7 in July.

A Reuters poll of analysts pointed to a reading of 100.4 in August.

Following the release of the German IFO Business Survey, the institute’s Economist Klaus Wohlrabe said that “70% of industrial businesses complain about supply chain bottlenecks.”

Also trade index has fallen, traders were less satisfied with their current business.

Export expectations have fallen but remain at a relatively good level.

Two thirds of companies in both manufacturing and retail sectors want higher prices to cover rising costs.