Confidence among German businesses keeps falling, the most recent monthly survey by a German think tank has shown. Current escalating global trade tensions were reported to be behind the drop in morale.German business confidence dropped for a second straight month in March, reaching its lowest level in nearly a year, Germany’s Ifo economic think tank reported Thursday.

The Munich-based institute said its business climate index, based on a monthly survey of some 7,000 German companies, fell to 114.7 points from 115.4 points in February.

“The threat of protectionism is dampening the mood in the German economy,” Ifo President Clemens Fuest said in a statement.

Solid growth not in danger

German executives appeared less satisfied with their current business situation. Firms were also less upbeat about developments in the coming six months.

Nonetheless, growth prospects in Europe’s powerhouse look good. Unicredit economist Andreas Rees said “there’ll be robust growth in the months ahead, even if the German economy probably has surpassed its peak.”

A sector breakdown of the Ifo figures showed the main drag came from retailing and manufacturing, while business sentiment improved in construction.

hg/sri (Reuters, AFP)