German business confidence rose to a
record in December as stronger domestic demand helped sustain a strong recovery
in Europe’s largest economy.
The Ifo institute at the University of Munich said its business climate index,
based on a survey of about 7,000 executives, increased to 109.9 from 109.3 in
November. That’s the highest since records for a reunified Germany began in
The Ifo Business Climate for industry and trade in Germany has
shown renewed improvement in December from an already high level. In the course
of the entire year 2010, the business climate index has risen sharply. Following
an increase in exports, increasing business investments have been responsible for the
upswing, and the outlook is now even good for domestic consumption, according to Ifo.
In manufacturing the business climate index has fallen
somewhat, but this is solely the result of a slight worsening in the business
expectations. The business situation is just as good as in November. Stronger
stimulus is expected from exports, and the firms are planning to hire additional
This month the improvement in the business climate in industry
and trade is attributable to retailing and wholesaling. The
retailers have assessed their current business situation as very good. In
addition, they are more optimistic regarding the next six months than in
November. The wholesalers have appraised their business situation as still very
positive though not quite as excellent as in the previous month. They expect an
improvement in their business in the near future.
In comparison to November, firms in construction have
given less favourable assessments of their current business situation. However,
with regard to business developments in the coming half year they are again more
Ifo Business Climate in the Service Sector Improves Again
The Ifo Business Climate indicator in the German service sector
has risen further in December. The service providers have once again assessed
their present business situation more favourably than in the previous month. In
addition, they are more optimistic regarding the six-month business outlook.
They again plan to increase their staff numbers.