May 30, 2018 / 7:42 AM / a year ago

Germany's DIHK slashes 2018 growth forecast to 2.2 percent

BERLIN (Reuters) - Germany’s Chambers of Industry and Commerce (DIHK) on Wednesday lowered its 2018 growth forecast for the German economy to 2.2 percent from 2.7 percent previously, citing widespread uncertainty.

It said business morale had dipped slightly from a 25-year high at the start of the year as labor market bottlenecks and concerns about global trade weighed on sentiment.

The DIHK’s early summer sentiment survey, for which it polled around 24,000 companies, showed that business morale regarding current conditions eased slightly from the start of the year but was still at the second highest level in 25 years.

Just over half - 51 percent - of companies reported good business morale, down from 54 percent at the beginning of the year while 43 percent said things were satisfactory and 6 percent said things were bad.

“Skilled labor bottlenecks are making themselves felt,” the DIHK said in a report on the survey. “Companies are looking to their future business with a little less optimism than before... scepticism is growing with regard to international business.”

Asked about their expectations for the next 12 months, 26 percent of companies expected things to improve, down from 27 percent at the start of the year, with 65 percent expecting no change and 9 percent expecting a deterioration.

Writing by Paul Carrel; Editing by Michelle Martin

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