Berlin, Germany (4E) – Confidence among German businesses fell to its lowest level in five months in May, a sign that growth may slow down in the second quarter.
The business confidence index by Ifo Institute released Friday showed the measure falling to 110.4 in May from 111.2 in the previous month. The result is based on a monthly survey of 7,000 companies. The score was predicted to fall to 110.9.
The index for current conditions fell to 114.8 from 115.3 in the earlier month, while it was projected to climb to 115.4. Expectations among firms also fell in May, and the gauge slid to 106.2 in May from 107.3. The reading was below analysts’ estimates of 106.5.
Manufacturers’ sentiment dropped slightly in May, but continued to stay high. After a significant rise, confidence in wholesaling fell sharply. Contractors’ confidence also declined as a result of the weakness in current and future expectations.
The business climate index in the service sector tumbled to 21.4 in May from 22.1 in the previous month. While opinions of the current business situation were less favorable than in April, the assessment was more upbeat.
The German economy bounced back in the first quarter as initially projected, primarily boosted by domestic demand, according to a report by Destatis released Friday.