German business sentiment worsened in August for the second consecutive month as supply bottlenecks and concerns over the Covid-19 Delta variant clouded the short-term outlook.
The Ifo business-climate index decreased to 99.4 points in August from 100.7 points in July, data from the Ifo Institute showed Wednesday. This is the second consecutive decrease for the indicator after peaking at 101.8 in June.
The reading missed the consensus forecast from economists polled by The Wall Street Journal, who expected the index to decrease slightly to 100.3.
The latest deterioration in sentiment was driven by the business expectations component, which fell to 97.5 from 101.0 the previous month.
The measurement which gauges firms' current business situation improved slightly, to 101.4 in August from 100.4 in July.
"Supply bottlenecks for intermediate products in manufacturing and worries about rising infection numbers are putting a strain on the economy," said Clemens Fuest, president of the Ifo Institute.