Overview
- The Ifo business climate index for the German auto industry dropped to -35.0 in September from -22.0 in August, marking the weakest reading so far this year.
- Firms reported a significantly worse current business situation and judged their order backlogs smaller than in August.
- Export and employment expectations, which had improved earlier in the summer, reversed course and fell again in the September survey.
- Ifo industry expert Anita Wölfl said the sector remains in crisis, and companies also reported a marked decline in profitability in the third quarter.
- The slump matters for the wider economy because Germany’s carmakers are a major source of industrial output and exports, and some firms such as Volkswagen have announced large cost cuts and job reductions that will affect workers and supply chains.