The German economy continues to show signs of weakness, according to the latest ifo survey published on November 25, 2024. The Business Climate Index fell to 85.7 points in November, down from 86.5 points in October. The decline is primarily due to a worsening assessment of the current business situation, while expectations for the future only dropped slightly.
– The German economy lacks strength. It is especially the construction and industrial sectors that are under pressure, said Clemens Fuest, President of the ifo Institute, in the report.
Construction sector significantly affected
According to the ifo survey, the construction sector is particularly facing challenges. The business climate in this sector deteriorated considerably, as companies assessed both their current situation and future prospects more negatively. The sector generally reports lower activity levels and fewer new orders.
Industry and service sectors follow suit
The industrial sector also experienced a decline in its business climate. Companies expressed increased skepticism about the coming months, although their assessment of the current situation has slightly stabilized. Meanwhile, the service sector saw a marked deterioration in both its evaluation of the present situation and future expectations.
Trade shows weak signs of iImprovement
One sector is bucking the trend: trade. It saw a slight improvement, with businesses rating their current situation more positively and pessimism about the future easing. Despite this, the overall mood remains far from optimistic, and the sector continues to grapple with uncertainty.
Implications for the Fehmarn project
The downturn in the German economy raises questions about the potential impact on large infrastructure projects such as the Fehmarn Tunnel. The difficulties in the construction sector and the decline in industry could exert pressure on supply chains, pricing, and resource availability.
According to the ifo Institute, their analyses are based on approximately 9,000 monthly responses from companies in industry, services, trade, and construction. This broad data foundation makes the ifo report a key indicator of the overall economic development in Germany.
