German business sentiment deteriorated again this summer, according to a survey by the German Institute for Economic Research (IW).
More than a third of 2,000 German companies surveyed in June expected business activity to be weaker this year than in 2022.
The institute said there was currently no prospect of economic recovery.
“The Russia-Ukraine conflict and its impact on the global economy is developing into a continuing burden for businesses and consumers,” said IW economist Michael Groemling.
Some 34% of all companies surveyed in June expected production to deteriorate this year, while only 27% expected to improve, and this spring still saw more optimistic companies than pessimistic ones.
The pessimism is especially acute in the construction industry, which is struggling with high costs, high interest rates and low demand.
The situation was better for service providers, with one-third having positive production expectations and only 23% seeing negative ones, as fears of high energy costs eased and the employment situation stabilized.