Businesspeople in German signaled that they have come close to losing all hope for the economy now and in the foreseeable future, based on a widely followed survey. It is another sign that, country by country, the perception that the COVID-19 pandemic is destroying the economy is nearly universal.

The ifo Business Climate Index fell to an all-time low in April in a drop, which was characterized as “drastic” and a “massive deterioration in the current situation.” There was nothing to indicate a reason to believe in improvement. The figure posted was 74.3 points for April compared to 85.9 in March.

The numbers are particularly frightening for Europe. Germany is the largest economy in the region by far and is considered the engine of gross domestic product for the countries around it. As measured by nominal GDP, Germany is also the fourth largest nation in the world at $4 trillion last year, behind the United States ($20.5 trillion), China ($13.4 trillion) and Japan ($5 trillion).

Germany is ahead of the United Kingdom ($2.8 trillion) and France ($2.7 trillion). As a detailed measurement of the business climate in other nations, particularly the United States, are released, they are expected to mirror Germany’s.

The ifo Business Climate Index contained the following observation:

In manufacturing, the Business Climate Index has fallen to its lowest value since March 2009. Industrial companies’ current business situation worsened dramatically. Expectations are marked by extreme pessimism. The expectations indicator fell to a historic low. Demand for industrial products has collapsed.

In the service sector, the business climate indicator fell to a record low. Service providers have never reached such a poor assessment of their current situation. The pessimism of their expectations is also without precedent.

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