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German business morale falls again

Monday, October 27, 2014 - 01:49

German business sentiment darkens in October for a sixth month running, hitting its lowest level in almost two years. as German Amazon workers join a series of strikes, this latest data suggest Europe's largest economy could be in for a bumpy ride in the fourth quarter. Amy Pollock reports

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Workers at online retailer Amazon are on strike again across Germany as a dispute over pay and conditions rumbles on. Labour union Verdi says it wants pay at Amazon's distribution centres to match wages in the rest of the industry. (SOUNDBITE) (German) "VERDI" UNION SPOKESWOMAN FOR STATE OF HESSE, MECHTHILD MIEDEKE, SAYING: "Amazon is still refusing to negotiate with us. We will continue to put pressure on them until Amazon is ready to talk to us about a labour agreement." Strikes like this are becoming more familiar in Europe's economic powerhouse. Train drivers and pilots recently downed tools too. Combine the disputes with poor financial data and Germany is not the country it was a year or two ago. The latest reading of business sentiment continued the gloomy trend . The Ifo's survey of seven thousand firms fell in September to its lowest in nearly two years. Klaus Wohlrabe is from the think tank. (SOUNDBITE) (German) KLAUS WOHLRABE, IFO INSTITUTE, SAYING: "The investment goods sector continues to not do too well. There is a lot of hesitation to invest and the international crises play a role too, of course." Tensions over Ukraine are partly to blame. 10 percent of German exporters send their goods to Russia. (SOUNDBITE) (German) KLAUS WOHLRABE, IFO INSTITUTE, SAYING: "There is a factor there, even though overall, trade with Russia does not play too big a role in Germany. But you could say that it kills the atmosphere somewhat." Industry orders, output and exports have all plunged in recent months - Germany now expects to see growth of just 1.2% this year. IHS Global Insight's Antonio Timoner-Salva. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, SENIOR ECONOMIST, ANTONIO TIMONER-SALVA, SAYING: "It's bad news for everyone. Bad news for Germany, bad news for the periperhal countries and that again adds more pressure to the European Central Bank to do something about it." Germany has seen far worse figures before of course - and there were bright spots. Other surveys show the private sector was boosted by an upturn in manufacturing and there was more optimism amongst consumers heading into November.

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German business morale falls again

Monday, October 27, 2014 - 01:49