German business confidence weakened again in September, but companies in the plastics and rubber industries bucked the trend and expressed more optimism about their lot.

The German economics institute ifo (Munich; www.ifo.de) said its September poll of domestic managers showed a fifth consecutive decline in the headline business climate reading, which fell to 85.7 points. That number was also what the thinktank reported for last month, but due to an upward revision in the August result to 85.8, September experienced a slight shift downward. 

The latest measure was higher than expected but remained the worst in nearly a year, with the current conditions component of the index at its lowest since August 2020.

“The German economy is treading water,” the institute said.

Despite the overall decline, companies in the plastics and rubber industries were more hopeful, ifo said. The main confidence gauge for the sector rose to -16.2 from -21.6 last month thanks to increases in both readings that form the main index, the current assessment and expectations. The latter, a measure for the coming six months, jumped to -4.3 from -11.7 last month, ifo said.

But the numbers were still in negative territory, just like the preliminary September results of a survey of purchasing managers throughout German industry. While the overall composite reading climbed for a third straight month, the gauge remained in contraction territory. This combined with the weak current conditions reading from the ifo poll had analysts concerned that the German economy could shrink in the third quarter.

Plastics processors in Europe’s biggest economy announced a 3% sales increase in the first half of the year, but the results were mixed, with at least one sector reporting a double-digit decline.