BERLIN (AP) — German business confidence is stuck at its lowest level in more than two years as energy worries fuel expectations of a difficult winter, a closely watched survey showed Tuesday.
The Ifo institute said its monthly confidence index, a prominent health indicator for Europe’s biggest economy, edged down to 84.3 points in October from 84.4 last month. That’s the lowest level since May 2020, but it was still a better showing than economists’ forecast of a bigger slip to 83.5.
Managers’ assessment of their current situation was a bit worse than in September, though their expectations for the next six months brightened slightly.
“They are still worried about the coming months. The German economy is facing a difficult winter,” Ifo said in a statement, in which it added that “sentiment in the German economy continues to be grim.”
In the manufacturing sector, Ifo said, “order books are still full, although fewer and fewer new orders are coming in.” And it said that expectations in the retail sector “remain markedly bleak.”
Germany’s year-on-year inflation rate hit 10% last month and the government recently said it expects gross domestic product to shrink for three consecutive quarters.
Lawmakers last week cleared the way for the government to provide up to 200 billion euros ($195 billion) in subsidies to households and businesses through 2024 to ease the strain of high energy prices. However, the government has yet to finalize the details of that plan.
Officials say Germany is well-placed to get through the winter with sufficient energy after Russia cut off gas supplies, but stress that it will still be necessary to save gas.
The Ifo survey is based on responses from about 9,000 businesses across various sectors.