--German business sentiment deteriorated in January, falling to 90.1 points
--"The second wave of coronavirus has brought the recovery of the German economy to a halt for now," Ifo said
--Both components, business expectations and assessment of the current situation, suffered declines
By Maria Martinez
German business sentiment deteriorated in January due to tighter coronavirus restrictions, the Ifo Institute said Monday.
The Ifo business-climate index came in at 90.1 points in January compared with an upwardly revised 92.2 points in December. Economists surveyed by The Wall Street Journal had forecast a decline to 91.9 points.
Companies have become more pessimistic about the coming six months. The expectations component fell to 91.1 points from a revised 93.0 points in December, Ifo said.
"The second wave of coronavirus has brought the recovery of the German economy to a halt for now," Ifo said.
Companies also assessed their current business situation as worse than last month and this component fell to 89.2 points in January from 91.3 points in December.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
After eight consecutive rises of the manufacturing index, it fell this month due to notably less optimistic expectations among manufacturing companies. The index in manufacturing fell to 8.8 points in January from 9.1 points in December.
In the service sector, at minus 4.4, the business climate indicator was significantly lower than at the minus 0.4 in December. Companies adjusted their assessments of the current situation downward and they were also much more pessimistic about the coming months, Ifo said.
In trade, the business climate index plunged to minus 17.2 from positive 0.3 in December, suffering its steepest drop since April.
The business climate also worsened in construction, falling to minus 5.1 points from minus 0.8 in December, Ifo said.
Write to Maria Martinez at maria.martinez@wsj.com
(END) Dow Jones Newswires
01-25-21 0458ET
