German business morale deteriorated slightly in May for the first time in seven months though it remained at a high level overall, a leading survey showed, adding to signs of softening in Europe’s largest economy.
Although growth levels remain decent, separate data published yesterday showed the slowing of the German economy during the first quarter was down to a drag from foreign trade, which had propelled the economy for much of the past decade.
The Munich-based Ifo think tank said its business climate index, based on a monthly survey of 7,000 firms, edged down to 108.5 in May from 108.6 in April — slightly above the Reuters consensus forecast for 108.3, sending the euro to a day high against the dollar.
It comes after ZEW’s survey this week showed investor sentiment weakening and a purchasing managers’ survey showed private sector expansion slowing. The Ifo survey showed companies were more optimistic about the current situation than at any point since June 2014 but they became slightly more pessimistic about future prospects.
Sentiment in the manufacturing and wholesale sectors weakened while the mood among retailers and builders picked up. First quarter GDP data, confirmed at quarterly growth of 0.3%.
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