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German Business Confidence Logs Record Fall In March

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German business sentiment logged its steepest fall ever recorded since German reunification, as the spread of coronavirus weighed on economic activity, final survey data from ifo Institute showed Wednesday.

The business confidence index fell to 86.1 in March from 96.0 in February. This was the biggest fall since German reunification and reached its lowest level since July 2009. The preliminary reading for March was 87.7.

Sentiment among German managers has become extraordinarily dire, Clemens Fuest, ifo President said. "The German economy is in shock."

The final survey showed that companies' expectations darkened as never before. Assessments of the current situation also worsened considerably.

The business situation indicator came in at 93.0 in March versus 99.0 in the previous month and also below the preliminary estimate of 93.8.

At the same time, the expectations index plunged to 79.7 from 93.1. The flash score was 82.0.

In manufacturing, the business confidence index fell to its lowest level since August 2009. Never in the history of a reunified Germany has it fallen so far, the think tank noted.

In the service sector, the business climate indicator reported the greatest fall since the data was first recorded in 2005. At the same time, confidence in trade collapsed. In construction, the index fell comparatively moderately.

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