German business confidence dips to 16-year low

German business confidence slumped to the lowest level in almost 16 years in November as the global financial crisis sapped demand for exports.

The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, dropped to 85.8 from 90.2 in October. That's the lowest since February 1993. Economists expected a decline to 88.7, according to the median of 41 forecasts in a Bloomberg News survey.

German companies such as BASF SE, the world's largest chemicals maker, and carmakers Bayerischer Motorenwerke AG and Daimler AG are scaling back production as export orders dwindle. With Germany's economy helping to drag the euro region into the first recession since its inception, the European Central Bank is under pressure to lower interest rates aggressively when policy makers next convene on Dec 4.