German business climate index falls markedly in January

The Ifo Business Climate Index for industry and trade in Germany dropped markedly to 107.3 points in January from 108.6 points in December, the Ifo institute reported on Monday.

According to the Munich-based think-tank, assessments of the current business situation were scaled back slightly, but remained very good. However, business expectations clouded over significantly, Xinhua reported.

The climate index in manufacturing and construction both fell notably, while the indicator in wholesaling rose and the index in retailing remained almost unchanged, Ifo reported.

"Sentiment among German businesses weakened at the beginning of the year... The year started with an unpleasant surprise for the German economy," Ifo president Hans-Werner Sinn said.

The Ifo Business Climate Index, considered the most important barometer for the German economy, is based on about 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing.