The Ifo economic institute’s closely watched business climate index dropped to 100.0 points in October from 101.4 points in September, disappointing analysts surveyed by Dow Jones Newswires who had expected a slight rise.
The index “fell in October for the sixth time in succession. Companies again expressed growing dissatisfaction with their current business situation,” said Ifo president Hans-Werner Sinn.
“The clouds over the German economy are darkening,” he warned.
Ifo calculates its headline index on the basis of companies’ assessments of their current business and the outlook for the next six months.
The sub-index measuring current business dropped to 107.3 in October, its lowest level since June 2010, and the outlook sub-index was unchanged at 93.2 points.
Unlike many of its neighbours, Germany has shown strong resistance to the debt crisis that has swept through the 17-country bloc, relying on its powerful export motor to keep the economy humming.
It notched up modest growth of 0.3 percent in the second quarter while the eurozone as a whole contracted by 0.2 percent.
But even the German powerhouse has been unable to resist forever and a raft of economic data recently has suggested the economy is beginning to falter.