German business confidence drops for 5th consecutive month

Olaf Scholz, SPD candidate for Chancellor and Federal Minister of Finance, arrives for the presentation of the coalition agreement, in Berlin, Wednesday, Nov. 24, 2021. The three parties negotiating to form Germany's next government will finalize and present their coalition agreement Wednesday, two of the prospective partners said. The deal paves the way for center-left leader Olaf Scholz to replace longtime Chancellor Angela Merkel in the coming weeks. (Michael Kappeler/dpa via AP)

BERLIN (AP) — German business confidence has dropped for the fifth consecutive month amid persistent supply-chain bottlenecks and a resurgence of coronavirus infections in Europe's biggest economy, a closely watched survey showed Wednesday.

The Ifo institute said its monthly confidence index dropped to 96.5 points in November from 97.7 last month. Companies' assessment of both their current situation and their outlook for the next six months worsened. It was the lowest figure since February.

“Supply bottlenecks and the fourth wave of the coronavirus are challenging German companies,” Ifo said in a statement. It said that while manufacturers' future outlook brightened somewhat, that of firms in the service sector deteriorated, with the steep rise in COVID-19 infections to a string of new records leading to a plunge in expectations in the tourism and hospitality industries.

The Ifo survey is based on responses from about 9,000 companies in various business sectors.

While the new wave of coronavirus infections has prompted increasing restrictions in Germany and looks likely to lead to more, the country's post-election political transition appears on course to end soon, removing another source of uncertainty.

The three parties that have been negotiating to form Germany’s next government planned to present their coalition agreement later Wednesday, a key move toward a new administration under center-left leader Olaf Scholz taking office in the coming weeks.