Ifo Business Survey for August 2006

In German industry and trade the business climate worsened somewhat for the second time in succession but is still at a very high level after the strong rise in the first half year. The decline was due to reduced optimism in the business expectations of the enterprises. This might have been caused by apprehensions of negative effects of the imminent value-added tax increase, declining growth in the world economy and continuingly high oil prices. On the other hand, the current business situation was still appraised as positive.