German export confidence slides as last month’s ‘ray of hope’ for car manufacturing vanishes

German export expectations have fallen sharply with last month’s “ray of hope” in car manufacturing vanishing in the new year, according to the Ifo Institute.

Business confidence among German exporters fell to 5.9 in January, the lowest since the beginning of 2016, dropping from 8.7 in December.

The outlook for the automotive industry, as well as the chemical industry, had “worsened noticeably” the report said.

The survey, based on around 2,300 monthly reports from manufacturers, also found that “hardly any” growth was expected within the electrical and chemical industries.

“December’s ray of hope in the automotive industry has vanished at the beginning of the year – the outlook has worsened noticeably,” the Ifo institute president Clemens Fuest said.

“The new year is marked by worries among German manufacturers.”

German manufacturing export expectations have now fallen from 19.9 points in January 2018 to 5.9 this year.

In 2018 the German economy grew at its weakest rate in five years – growing by 1.5 per cent compared with 2.2 per cent the previous year, confirming the country’s downturn.

But the Eurozone powerhouse may have narrowly avoided a technical recession as the Federal Statistics Office said the economy was likely to have grown slightly in the fourth quarter.

Last week the Ifo Institute said “disquiet” was growing among German companies as its business climate index fell to its lowest level since February 2016.

The manufacturing, trade and construction industries all suffered a sharp downturn when it came to expectations and business climate.