A recent survey conducted by the Ifo economic institute revealed that sentiment among German exporters has deteriorated significantly in September, reaching its lowest level since May 2020.
The Ifo institute's export expectations indicator, in its fifth consecutive month of decline, dropped to minus 11.3 points in September, down from minus 6.5 points in August. Klaus Wohlrabe, Head of Surveys at Ifo, noted that Germany's export economy is currently experiencing a period of weakness. He also suggested that a significant improvement in export demand may not be expected until the following year.
The decrease in export sentiment is attributed, in part, to central banks' actions to combat inflation through interest rate hikes, resulting in higher financing costs for investments and rendering numerous projects unviable. Wohlrabe emphasized that elevated interest rates were impacting the demand for German products.
According to the Ifo's statement, all sectors, except for leather goods, furniture manufacturers, and some segments of the food industry, are facing a decline in foreign business.
The hopes for growth in the German chemical industry that emerged last month did not materialize in September, as per the survey. Car manufacturers also displayed increased skepticism.
The survey underscores the challenges currently faced by the German export sector and its outlook in light of global economic dynamics and monetary policy changes.