The ifo business climate index for June fell further and is now well below its high seen at the end of last year. This shows that Germany’s economic momentum has clearly eased compared with second-quarter 2017.
That said, the feared crunch in expectations as regards coming months did not materialise in June. The threat of new US tariffs has, in other words, not caused panic among German companies. The level of the ifo business expectations index for coming months remained unchanged on the May figure.
By contrast, German companies rate their current business situation slightly weaker than in the past. Sadly, the global economic sun would no longer seem to be shining so strongly as just a few months ago. Alongside the threat of a trade conflict with the USA, the difficult political situation in Europe most probably also plays a role here.
What is clear is that the phase of a synchronous international upturn is over, and the climate for export trade has already become far tougher. Companies are gearing up for harder conditions. Nevertheless, the current survey figures point to the economy remaining robust and the risk of recession therefore remains relatively minor.