German business climate index falls unexpectedly in September: Ifo

German business climate index falls unexpectedly in September: Ifo

A statue in front of the Deutsche Bank in Frankfurt.

The German think tank said Monday that its business climate index fell to 115.2 points from 115.9 points in August. The reading compared with a Reuters consensus forecast for a value of 116.0.

But the Ifo survey does not reflect Sunday's election result, which shows a steep drop in support for Chancellor Angela Merkel's conservative alliance and a surge in anti-immigrant sentiment.

"We suspect that a more likely cause of the decline is the recent strength of the euro, rather than political uncertainty", Capital Economics analyst Stephen Brown said. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers.

Meanwhile, the current assessment index declined to 123.6 from 124.7, falling short of expectations of 124.8, while the expectations index slipped to 107.4 from 107.8, versus expectations for a reading of 107.9.

A growing population, increased job security and record-lowinterest rates are fuelling a property boom in Germany.

Business confidence from France is due on Tuesday, headlining a light day for the European economic news. Prices had increased 5.7 percent on year in July.

The sub-index for manufacturing fell to 27.9 in September from 29.9 in August, but the index for construction ticked up to 18.3 from 17.4.