German business confidence shifts as business risks jostle prospects

German business confidence resumed its decline in June, with business risks intensifying and economic data remaining mixed.

The Ifo Institute's confidence indicator has fallen for six of the past seven months, and the latest decline comes as trade tensions between the US, China and Europe continue to plummet. 39; increase. The index is now at its lowest level in a year, while the expectations component is the weakest in over two years.

The latest reading, at least in line with economists' forecasts, is part of a string of bad economic news in the eurozone. Consumer confidence in the region has dropped this month, and a more detailed sentiment report, to be released Thursday, will be reviewed to get clues on the direction of the economy over the second half of the year.

There were some optimistic numbers in the region last week, when the purchasing manager indexes arrived stronger than expected in June. Nevertheless, growth has been driven by services as manufacturing growth continues to slow.

In Germany, Europe 's largest economy, mill dynamics have cooled throughout 2018, and US trade protectionism threatens to continue dampening production.

At their meeting this month, officials at the European Central Bank pointed out that tariffs were one of the main risks for the euro area economy, and policy makers, including the President of the US Federal Reserve, Jay Powell, echoed concerns at a conference last week.

US President Donald Trump said Friday that he would impose a 20% tax on all cars imported from the European Union, unless the bloc removes import duties and other barriers to products US. That would hurt Germany the auto industry, and shares of automakers BMW AG and Volkswagen AG have fallen this month.

At the same time, the Bundesbank has kept its estimates that the German economy will accelerate, supported by record consumption and unemployment. The PMI released last week showed a better-than-expected recovery in the nation's services sector, although manufacturing growth continued to slow.

– With the help of Kristian Siedenburg and Andre Tartar

(Updates with graph.)