German business sentiment unexpectedly falls in November

German business morale unexpectedly fell in November, a survey showed on Monday, as companies lose hope on a recovery of the German economy following two years of contraction.

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The Ifo institute said its business climate index fell to 88.1 in November from 88.4 in October, below a consensus of 88.5 from a Reuters poll among analysts.

“Companies have little faith that a recovery is coming anytime soon,” said Ifo president Clemens Fuest.

“After the ups and downs of the past three months, there can no longer be any talk of an upward trend in the Ifo index,” said Ralph Solveen, senior economist at Commerzbank.

There was a decline across all sectors with the exception of services, where there was a small improvement. The Ifo decline is in line with the message of the HCOB preliminary German flash composite Purchasing Managers’ Index, which showed on Friday that Germany's private sector growth has lost momentum in November.

On the other hand, companies assessed their current situation as somewhat more positive, Ifo said.