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November 25, 2009

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Home » Business » Economy

German biz confidence on rise

GERMAN business confidence rose for an eighth consecutive month in November as Europe's biggest economy recovered steadily from its worst recession in decades, a leading survey showed yesterday.

The Ifo business climate index rose to 93.9 points in November from 92 points the month before, beating analysts' expectations.

"The firms are again not quite so dissatisfied with their current business situation," Ifo President Hans-Werner Sinn said in a statement. "Also, their view of the business outlook in the coming six months is more favorable than in October."

The Munich-based group said the climate for industry and trade clearly improved in November, while manufacturing, wholesale and retail also posted improvements in their current business expectations readings.

"The Ifo business climate index rose stronger than expected," Alexander Koch, a UniCredit economist, said in a research note. Experts had predicted a rise to 92.5, while UniCredit was looking for a 92.8 reading, Koch said.

"Business expectations and new orders continue to point clearly north, arguing against an abrupt end of the current solid economic rebound, which started from very depressed levels."

Koch said while he doesn't see much room for a further acceleration in growth, "the momentum in the inventory cycle and the improvement of global trade provide enough tail wind for the coming months."

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

They judged that their current situation in November was better than the previous month, with the index rising to 89.1 from 87.4.

Expectations for the next six months rose to 98.9 from 96.8.


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