Ifo survey points to Germany recovery

Published Nov 25, 2014

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Andrew McCathie Berlin

THE MOOD in German business boardrooms lifted unexpectedly this month, a closely watched survey showed yesterday, raising hopes for the outlook for the country.

The Munich-based Ifo economic institute reported its business confidence indicator jumped to 104.7 points this month from a reading of 103.2 last month, bringing to an end six consecutive months of falls.

Analysts surveyed by dpa-Afx had expected a decline to 103.

The German economy narrowly avoided stumbling into a recession in the third quarter when it grew by a meagre 0.1 percent after contracting by 0.1 percent in the three months ended June.

“The downturn in the German economy has come to a halt, at least for the moment,” said Ifo chief Hans-Werner Sinn.

The Ifo survey pointed to a positive trend emerging across all industrial sectors, including Germany’s key manufacturing sector.

“Manufacturers continue to expect further stimulus from their export business,” said Sinn.

The gain in the Ifo came in the wake of a weaker euro, lower oil prices, as well as hopes that global tensions might be easing.

The European Central Bank has also signalled plans to unveil a new set of stimulus measures to help keep the 18-member euro zone on an economic growth trajectory.

German investor confidence also rose for the first time since the start of the year this month, according to a survey released last week by the Mannheim-based ZEW institute.

The Ifo’s rise this month was also welcome news to investors, who pushed the Frankfurt share market’s main DAX index up 0.75 percent to 9 805.74 points following the release of the survey.

Based on a monthly survey of about 7 000 companies, the Ifo indicator showed both business leaders’ assessment of the current economic conditions in Germany and their expectations for six months down the track rose this month.

While the index measuring business conditions edged up to 110 points this month from 108.4 in October, the gauge measuring expectations climbed to 99.7 points from 98.3.– Sapa-dpa

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