German Business Confidence Strongest Since Mid-2011
27 März 2017 - 8:34AM
RTTF2
German business sentiment strengthened to a 68-month high in
March as economic impetus pushed up companies' assessment of the
current assessment and outlook.
The business confidence index rose to 112.3 in March from a
revised 111.1 in February, survey data from the Munich-based Ifo
institute revealed Monday.
This was the highest reading since July 2011. Economists had
forecast the indicator to fall to 110.8 from February's originally
estimated 111.0.
The current conditions index came in at 119.3 versus 118.4 a
month ago. The score was also well above the expected score of
117.9.
Likewise, the expectations index climbed to 105.7 from a revised
104.2 in February. The reading was forecast to rise to 104.3.
Driven by more optimistic expectations among manufacturers,
business sentiment rose to its highest level since July 2011. The
improvement was largely driven by a renewed upturn in demand.
On the other hand, the business climate index in wholesaling
deteriorated in March after a sharp increase. Assessments of both
the current business situation and expectations were scaled
back.
In retailing, the indicator improved as retailers assessed their
current situation far more favorably, while the short-term business
outlook clouded over slightly.
The business climate index in the construction sector
strengthened in March as their assessment of the current business
situation reached the highest level since 1991.
Even though the German economy could still use some new
structural reforms, today's Ifo index illustrates that low interest
rates, a relatively weak euro and continued government consumption
should once again extend the current golden cycle, Carsten Brzeski,
an ING Bank economist, said.
Both the Ifo and PMI survey point to a stronger quarterly gain
in GDP in the first quarter than fourth quarter's 0.4 percent,
Jennifer McKeown, chief European economist at Capital Economics,
said.
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