The latest data from the German Institute for Economic Research (DIW, Berlin; www.diw.de) has shown a decline in the organisation’s economic barometer to 90.3 points in the third quarter following 94.1 in the previous three months, keeping the value well below 100, the level indicating average. 

Geraldine Dany-Knedlik, the co-head of institute forecasting and economic policy, said there are increasing signs that this year’s economic development will be weak.

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Above all, the German industry is deteriorating, according to the institute. Despite fewer supply chain problems, production is recovering more slowly than expected and incoming orders are also soft, researchers wrote. The current order backlog is “still comparatively high” across all sectors but is shrinking more and more.

“The German economy is plodding along,” said DIW economist Guido Baldi. Contrary to fears, the energy crisis did not lead to a deep recession, he noted, but its consequences are still preventing the business activity from gaining momentum.

German business confidence fell for the third consecutive month in July.