The German economy is facing difficult months.

For the fourth time in a row, the Ifo Institute's business climate index, which is based on a survey of 9,000 companies, has fallen.

The important sentiment barometer fell to 97.7 points in October after 98.9 points in September.

The Munich institute announced on Monday.

As a result, the mood in companies continues to deteriorate.

According to Ifo, expectations are increasingly characterized by skepticism.

The companies are also less positive about the current situation.

"Delivery problems are causing problems for companies," said Ifo President Clemens Fuest.

Capacity utilization in industry is falling.

"Sand in the gears of the German economy is holding back the recovery," he said.

The executives were more skeptical than before about their situation and the business outlook for the next six months.

Only the construction expects improvement

The business climate has deteriorated further in the manufacturing, service and retail sectors. In the manufacturing sector, capacity utilization also fell by 2.1 percentage points to 84.7 percent as a result of the delivery bottlenecks, which also affects retail. In contrast, in the construction industry, the assessment has improved again.

The German economy had shrunk by two percent at the beginning of the year due to the corona crisis, but then grew by 1.6 percent in the course of the lockdown easing in the spring.

Despite delivery bottlenecks for important preliminary products, many economists assume that growth is likely to have accelerated in the past summer quarter.

The Kiel IfW Institute expects the gross domestic product (GDP) to increase by 2.2 percent compared to the previous quarter.

However, due to the global scarcity of materials and increasing corona infections, the economy is likely to lose momentum again in the current final quarter.

This was also recently signaled by the surveys of industry and service providers on the purchasing manager index.

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