BERLIN - German business morale fell to its lowest level since November 2014 in June, a survey showed on Monday, adding weight to expectations that Europe’s largest economy contracted in the second quarter.
“The German economy is heading for the doldrums,” Ifo President Clemens Fuest said, adding that the business climate in both the manufacturing and services sectors had worsened. Ifo economist Klaus Wohlrabe said the trade conflict between the United States and China was the main source of uncertainty for German businesses, which rely on exports to the world’s two largest economies for growth.“All told, we expect the German economy to slow to little more than a crawl in the second quarter,” Christina Iacovides of Capital Economics wrote in a note.
The services sector, buoyed by a solid domestic economy, has been providing impetus as industry shrinks, but some economists fear the recession in the manufacturing sector could spread.