BERLIN (AP) — German business confidence has dipped unexpectedly this month as increasing coronavirus infections help cloud businesses' outlook for the coming months, a closely watched survey found Monday.

The Ifo institute's business confidence index declined to 100.8 points in July from 101.7 a month earlier. It was the first decline since January. Economists had expected an increase to 102.5.

While managers' assessment of their current situation improved, their outlook for the next six months worsened significantly. Ifo said that their optimism was clouded by problems with the supply of raw materials and other products and by an upturn in coronavirus infections.

Germany’s infection rate remains very low compared with some other European countries, but it has been rising steadily since it bottomed out in early July. The increase is being fueled by the more contagious delta variant, which is now dominant.

The Ifo survey is based on monthly responses from about 9,000 companies across the German business spectrum.