German business confidence drops amid global, local concerns

MarketsAssociated Press

German business confidence dropped sharply in February amid increasing concerns about both domestic and international risks.

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The Munich-based Ifo Institute said Thursday its business climate indicator fell to 115.4 points in February from 117.6 in January, while noting it remained near historic highs.

ING economist Carsten Brzeski says the figures show concerns about "market turmoil, the political impasse in Berlin and new fears of a protectionist wave from the U.S. as well as the U.S. tax reform" are beginning to take their toll.

Despite the risks, he says "the economy should maintain its strong momentum."

He says company's "order books are still richly filled and the domestic momentum remains strong."

The survey is based on about 7,000 responses from firms in manufacturing, construction, wholesaling and retailing.