Germany’s business climate has taken a hit. The ifo Business Climate Index fell to 88.6 points in June from 89.3 in May, driven by more pessimistic future expectations. Current conditions remained unchanged, reflecting the ongoing struggle of the German economy to overcome stagnation.

Significant declines were observed across sectors: manufacturing (-9.2%), trade (-23.5%), and construction (-25%), with an overall drop of 6.3%. The Mechanical Engineering Association reported a 44% decrease in domestic orders and a 16% fall in international orders, marking a 27% overall drop compared to the previous year.

May also highlighted production weaknesses, notably in electrical equipment (-7.2%), mechanical engineering (-5.9%), pharmaceuticals (-5.4%), and automotive sectors (-5.2%).