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Germany weathering the storm
Source: Agencies |
December 21, 2011, Wednesday
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Print Edition
GERMAN business and consumer confidence is ending 2011 on a high note despite fears about the European economy, two surveys showed yesterday.
The Ifo Institute's monthly index measuring business confidence increased to 107.2 points from 106.6, as participants' assessment of their current situation remained unchanged but expectations for the next six months rose.
"The German economy seems to be successfully countering the downturn in Western Europe," said Ifo president Hans-Werner Sinn.
Ifo surveyed approximately 7,000 businesses.
Consumer confidence also proved resilient, according to the GfK research institute's forward-looking indicator for January. It remained unchanged from December's 5.6 points as people were optimistic "despite rising economic risks and further escalation of the debt crisis."
There were mixed messages from the survey, however, as German income and economic expectations both rose but consumers' willingness to buy dropped significantly, to 27.4 from 40.3, GfK said.
"Willingness to buy did not benefit from the improvement in economic and income expectations," GfK said, noting it still remained at a "comparatively high level."
GfK said its survey of 2,000 consumers was almost complete before the most recent EU summit in Brussels and it was unclear whether the inclination to hold back on purchases may have been resolved with the broad agreement reached there. But it also said that while economic expectations are "defying the rising fears of recession," that might change as the debt crisis hurts exports.
"With most German companies operating at above average capacity, the labor market is very robust and unemployment figures continue to fall," GfK said. "Whether this trend can be sustained remains to be seen. The European debt crisis is increasingly likely to become a problem for Germany's export economy."
The Ifo Institute's monthly index measuring business confidence increased to 107.2 points from 106.6, as participants' assessment of their current situation remained unchanged but expectations for the next six months rose.
"The German economy seems to be successfully countering the downturn in Western Europe," said Ifo president Hans-Werner Sinn.
Ifo surveyed approximately 7,000 businesses.
Consumer confidence also proved resilient, according to the GfK research institute's forward-looking indicator for January. It remained unchanged from December's 5.6 points as people were optimistic "despite rising economic risks and further escalation of the debt crisis."
There were mixed messages from the survey, however, as German income and economic expectations both rose but consumers' willingness to buy dropped significantly, to 27.4 from 40.3, GfK said.
"Willingness to buy did not benefit from the improvement in economic and income expectations," GfK said, noting it still remained at a "comparatively high level."
GfK said its survey of 2,000 consumers was almost complete before the most recent EU summit in Brussels and it was unclear whether the inclination to hold back on purchases may have been resolved with the broad agreement reached there. But it also said that while economic expectations are "defying the rising fears of recession," that might change as the debt crisis hurts exports.
"With most German companies operating at above average capacity, the labor market is very robust and unemployment figures continue to fall," GfK said. "Whether this trend can be sustained remains to be seen. The European debt crisis is increasingly likely to become a problem for Germany's export economy."
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