BERLIN, May 24 Reuters German business morale fell further than expected in May due mainly to a sharp decline in future expectations, another sign that Europe39;s largest economy is facing stubborn economic headwinds, a survey showed on Wednesday.

The Ifo institute said its business climate index stood at 91.7 following a reading of 93.4 in April. A Reuters poll of analysts had pointed to a May reading of 93.0.

This is the first decline after six consecutive increases. In May both components of the indicator fell managers were significantly more pessimistic in their expectations and were somewhat less satisfied with their current situation.

German companies are sceptical about the upcoming summer, said Clemens Fuest, president of the Ifo Institute.

The expectations indicator fell to 88.6 in May from 91.7 in April.

The strong collapse in expectations in industry is striking, said Ifo39;s economist Klaus Wohlrabe. Export expectations have fallen markedly as interest rates appear to dampen demand, he added.

Reporting by Linda Pasquini and Friederike Heine, editing by Kirsti Knolle

Source Reuters