- Title: German business morale falls on rising COVID cases, bottlenecks
- Date: 25th August 2021
- Summary: MUNICH, GERMANY (AUGUST 25, 2021) (REUTERS) IFO PRESIDENT CLEMENS FUEST WALKING PAST (SOUNDBITE) (German) IFO PRESIDENT CLEMENS FUEST, SAYING: "The business sentiment index has dropped. There are two elements to this index: we ask businesses how they are doing and what their expectations are for the coming months. The current state of business is pretty good, according to the companies, and as even improved slightly. But expectations for the coming 6 months have got worse and that is why the index has dropped." FUEST'S HANDS VARIOUS OF FUEST TALKING TO MEDIA (SOUNDBITE) (German) IFO PRESIDENT CLEMENS FUEST, SAYING: "Companies are worried about two things. One: scarcity of intermediate products and semi conductors but also many other products like metals and synthetic materials. Many companies have used up supplies from their warehouses and have found their own solutions but they say that is things carry on like this they will run into difficulties. The other element is the rising infection numbers which is effecting hospitality and tourism. Companies are saying that at the moment things are going well, they are full, events are running again but if the figures continue to go up then people won't want to go out any more." VARIOUS OF IFO BUSINESS SENTIMENT GRAPHICS (SOUNDBITE) (German) IFO PRESIDENT CLEMENS FUEST, SAYING: "The demographic and the scarcity in the labour force connected to this is a big problem in regards to economic growth in the coming years and there are some policy areas that could be adapted. One of these is immigration, whereby they would push for skilled migrants to come and I agree that this is an important point but this isn't the only option. We also have to ask ourselves how the Harz IV (state benefits system) is working and whether the right incentives are in place (to go back to work)." FUEST TALKING TO JOURNALIST SIGN FOR IFO INSTITUTE ENTRANCE TO IFO INSTITUTE
- Embargoed: 8th September 2021 13:25
- Keywords: Germany Ifo business sentiment index economy hospitality
- Location: MUNICH, BERLIN & WOLFSBURG, GERMANY
- City: MUNICH, BERLIN & WOLFSBURG, GERMANY
- Country: Germany
- Topics: Europe,Economic Events
- Reuters ID: LVA001ERS1IML
- Aspect Ratio: 16:9
- Story Text:German business morale fell for the second month running in August, as supply bottlenecks and rising COVID-19 cases drove companies to take a dimmer view of the coming months in Europe's largest economy, a survey showed on Wednesday (August 25).
The Ifo institute said its business climate index came in at 99.4, missing an analyst consensus of 100.4 in a Reuters poll and down from a downwardly revised reading of 100.7 in July.
"The mood in the German economy has clouded over again," Ifo President Clemens Fuest said in a statement. "Supply bottlenecks for intermediate products in manufacturing and worries about rising infection numbers are putting a strain on the economy."
Concerns were growing in the hospitality and tourism sectors in particular, he added.
Data on Tuesday showed the economy grew more than expected in the second quarter as the easing of COVID-19 curbs spurred consumers to dip into record savings piled up during the winter lockdown, and the state pressed on with a huge debt-financed stimulus push.
But with government officials warning of a fourth COVID-19 wave during the autumn, the months ahead look more problematic.
Earlier this month, BMW raised its 2021 profit forecast after strong quarterly results, but said the global semiconductor chip shortage and rising raw materials prices would hurt its performance in the second half of the year.
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