Struggling industry saps German business morale as trade woes bite

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German business morale deteriorated in April, bucking expectations for a small i...

BERLIN/MUNICH - German business morale deteriorated in April, bucking expectations for a small improvement, as trade tensions hurt the industrial engine of Europe’s largest economy, leaving domestic demand to support slowing growth.

The Munich-based Ifo economic institute said on Wednesday its business climate index fell to 99.2 in April from an upwardly revised 99.7 in March, the first rise after six straight declines. The consensus forecast for a rise to 99.9. The government had already cut its 2019 forecast in January to 1.0 percent growth from 1.8 percent previously. Long the euro zone’s economic powerhouse, Germany is in its 10th year of expansion, but only narrowly avoided recession last year.

“Pessimism is increasing,” Ifo economist Klaus Wohlrabe told Reuters. “The industrial sector is dragging down the German economy.”

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