German manufacturing is in 'free fall,' say factory executives
- German manufacturing is in "free fall," according to a survey from German executives.
- The Ifo's Institute's manufacturing business and climate index slumped in July.
- Germany's services sector also declined in the survey.
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Germany factory execs say the industry is in "free fall" and won't be rebounding any time soon.
That's according to a survey from one of the country's leading research bodies. The Ifo Institute's manufacturing business climate index, which surveys Germany industry executives, showed that in services industry, executives were "slightly pessimistic" for the first time since July 2009.
"In manufacturing , the business climate indicator is in free fall," said Clemens Fuest, president of the Ifo Institute. "An improvement in the situation is not to be expected for the time being, because the entrepreneurs are more pessimistic about the coming six months."
The reading was based on about 9,000 monthly reports from areas of manufacturing, services, trade, and construction. The reading in July was -4.3, from +1.3 in June.
The survey's results came hours before the European Central Bank's policy decision, where many are expecting stimulus.
This week, Markets Insider reported that German industry was dragging down the eurozone economy with it.
See More: The UK, German and Italian economies are all tanking at the same time
Since late 2018, German manufacturing has been in a particularly poor state. In an analyst note this week, Pantheon Macroeconomics said that the sector is "effectively in a recession."
The broader Ifo sentiment Gauge, which looks at Germany's services, declined to its lowest level since 2013.
Fuest said: "In the services sector, the business climate has deteriorated. The service providers were a little less satisfied with their current situation. Expectations were slightly pessimistic for the first time since July 2009."
Even if you don't read German, this chart doesn't look good:
