Business confidence in Germany fell in August, according to the Ifo Business Climate index. The index declined to a reading of 106.2 in august from a reading of 108.3 in July.

“The German economy has fallen into a summer slump,” according to the report. “In manufacturing, the index has fallen again. The industrial firms were less satisfied with their current business situation. The expectations also clouded over markedly, falling below their long-term average. Especially the volume of new orders declined. The business climate index fell in nearly all industry branches, most clearly, however, in the chemical and electrical industries.”

The index is based on 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing.

Separately, the Ifo Business Climate in the Service Sector index rose to a reading of 27.7 in August from a reading of 29.5 in July. Ifo reported more firms in this report planned to hire new employees. This index is based on 2,500 monthly survey responses from firms in the services sector.