German business sentiment fell more than expected in November, a survey showed on Monday, the latest sign that industry is losing faith in the government\u2019s plans to revive the economy.<\/p>\n
The Ifo Institute\u2019s confidence barometer dipped to 88.1 points from 88.4 points in October. Analysts surveyed by financial data firm FactSet had expected a reading of 88.3 this month.<\/p>\n
\u201cSentiment among companies in Germany has deteriorated,\u201d said Ifo president Clemens Fuest.<\/p>\n
\u201cThey have little faith that a recovery is coming anytime soon.\u201d<\/p>\n
After two years of recession due to an industrial slump and weak demand, Chancellor Friedrich Merz earlier this year promised a barrage of measures, including a public spending blitz, to reboot Europe\u2019s top economy.<\/p>\n
But criticism is mounting that the plans are moving too slowly, hobbled by political bickering, bureaucratic inertia and a lack of focus on deep-rooted reforms.<\/p>\n
In the latest Ifo survey, companies\u2019 expectations for the future fell particularly heavily, which LBBW bank economist Jens Oliver-Niklasch described as alarming.<\/p>\n
\u201cWe have not moved forward since the summer,\u201d he said, adding that Merz\u2019s promised \u201cautumn of reforms\u201d had failed to materialise.<\/p>\n
Expectations for the months ahead in the key manufacturing sector took a significant hit, according to the Ifo survey, which noted companies reported lower order books. There were also declines in morale in the trade and construction sectors.<\/p>\n
However, the picture in the service sector brightened, with morale improving once again.<\/p>\n
Despite Monday\u2019s disappointing reading, Dirk Schumacher, chief economist at German public lender KfW, noted that corporate expectations had trended up over the course of the year.<\/p>\n
\u201cAs the days soon become longer again, growth is likely to return,\u201d he said. \u201cWe expect a noticeable increase in gross domestic product in 2026, driven primarily by fiscal stimulus.\u201d<\/p>\n
The government forecasts growth of 0.2% for this year, and 1.3% in 2026.<\/p>\n
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