German business confidence dropped for the third consecutive month in February, the Munich-based Ifo research institute said Tuesday. The think tank's closely watched business climate index slumped to a level not seen since January 2015.

The latest monthly barometer gauging the mood among German executives reached 105.7 points this month, down from 107.3 points in January.

"The majority of the 7,000 managers polled was pessimistic about its business outlook," Ifo said in a statement.

"With production levels falling at the end of 2015, manufacturers fear that the downturn will continue."

Sector-specific differences

Analysts said the latest Ifo reading showed that Germany's powerful export industry was starting to wake up to global concerns roiling international markets.

ING economist Carsten Brzeski noted the data indicated that "global events have finally reached German companies' boardrooms."

"Expectations have taken another sharp hit from recent market turmoil, the adverse impact of low oil prices and renewed concerns about China's economic slowdown," he added.

Ifo said the building industry provided a silver lining, with the sector continuing to be in good shape and full of growth expectations thanks to low interest rates and growing demand for apartments as the influx of migrants continued.

hg/bea (AFP, Reuters)