Business sentiment in Germany worsened in August as firms grew more pessimistic about the current situation, the Ifo economic research institute said today.
In the first decline since May, the Ifo's business climate index fell to 94.6, from 95.0 in July. The index is based on a monthly survey of about 7,000 firms.
The deterioration comes less than a month before a general election, which opinion polls suggest Social Democrat Chancellor Gerhard Schroeder will lose to the opposition conservatives led by Angela Merkel.
However, Ifo president Hans-Werner Sinn said that despite the downward slide in August, the index was still higher than in March to June. He also noted that companies' expectations for the coming six months had become more favourable.
"On the whole, the latest survey results do not rule out a moderate improvement in the coming months," he said.
Ifo's measure of current business conditions dropped to 93.8 from 94.9, while a gauge of expectations for the next six months rose to 95.4 from an upwardly revised 95.1.
