BERLIN: The confidence of German companies deteriorated again this summer, according to a survey by the German Economic Institute (IW) to which Reuters had access on Thursday.

More than one third of the 2,000 German companies surveyed in June expect weaker business activity this year than in 2022. There is currently no prospect of an economic upswing, the IW, an economic institute close to employers, said.

"The war in Ukraine and its consequences for the global economy are developing into ongoing burdens for companies and consumers," said IW economic expert Michael Groemling.

About 34% of all companies surveyed in June expect their production to deteriorate this year, while only 27% expect it to improve. In spring 2023, however, there were still more optimistic companies than pessimistic.

The construction industry in particular is struggling with high costs, higher interest rates and lower demand. Here, the share of pessimists clearly outweighs the optimists.

The situation is better among service providers, as one third of the companies have positive production expectations and only 23% have negative ones. The reason is that the fear of high energy costs has decreased and the employment situation is stable.

"This favours consumption. But here, too, the overall mood has worsened since the spring," the institute said. (Reporting by Klaus Lauer; Writing by Maria Martinez; Editing by Sandra Maler)