The war in Ukraine not only causes the mood in the executive floors of large corporations to plummet, but also that of micro-enterprises and the self-employed.
The business climate index for this economic sector fell to minus 10.0 points in March, after plus 2.6 in February, as the Munich Ifo Institute announced on its survey on Thursday.
"February's burgeoning hope collapsed due to the Russian attack on Ukraine," said Klaus Wohlrabe, head of Ifo polls.
“Uncertainty is also spreading among micro-enterprises and the self-employed.”
The clear decline is due to the crash in expectations for the next six months.
However, the companies surveyed gave a slightly better assessment of the situation.
At the same time, more and more of them are announcing price increases.
"The micro-enterprises and the self-employed are no exception," it said: Every second company reported plans for price increases.
Russia invaded neighboring Ukraine on February 24, prompting the West to impose tough sanctions.
That caused the Ifo index - which is considered the most important early indicator for the development of the German economy and for which around 9,000 managers are surveyed every month - to collapse in March.
Companies are struggling with rising energy costs, but also with shortages of various materials and preliminary products.
The economists have therefore drastically lowered their growth forecast for Germany: Gross domestic product is only likely to increase by 1.8 percent this year instead of the 4.6 percent expected in November.
A severe recession cannot be ruled out either.
Since August 2021, the Ifo Institute has been calculating the business climate index for the self-employed and micro-enterprises with fewer than nine employees, cooperating with Jimdo, a provider of online tools.
All economic sectors are represented, but the focus is on the service providers.