German business confidence fell to the lowest in more than two years in June, according to the reading on the Munich-based Ifo institute business climate index, based on a survey of 7,000 executives, which declined to 101.3 from 103.5 in May. That's the lowest since January 2006.
According to IFO in manufacturing the business climate worsened significantly. Firms have scaled back both their current situation assessment as well as the six-month business outlook considerably from May. Expectations fell from a revised 97.2 to 94.7. They expect weaker stimulus from export business in the coming months, but despite the strong euro, they do not fear a slump in exports. Increases in employment will be weaker, according to the survey responses.