German business confidence unexpectedly rose to the strongest level in 2 1/2
years in a positive sign of growth in Europe’s largest economy may accelerate.
However, the separate service sector index fell.
The Ifo institute’s business climate index, based on a survey of 7,000
executives by the economists at the University of Munich, advanced to 111.3 in
February from 110.6 in January. That’s the fourth monthly gain and the strongest
reading since July 2011.
The business climate in manufacturing improved for the fourth month in
succession. Manufacturers are far more satisfied with the current business
situation. Their confidence in future business developments weakened slightly,
but remained high. Although the export outlook clouded over, the majority of
manufacturers remain optimistic.
After last month’s sharp increase, the business climate index in wholesaling
decreased slightly. Wholesalers were once again clearly more satisfied with
their current business situation. However, they are no longer quite as positive
about future developments. In retailing, the business climate index rose
significantly. The current business situation improved, with assessments
reaching their highest level since spring 2012. Expectations regarding future
business developments also continued to brighten.
The business climate index in construction fell slightly. Assessments of the
current business situation are less favourable, but remain at a high level. Last
month’s optimism regarding the next six months also faded somewhat.
The Ifo Business Climate Indicator for the German service sector fell in
February. Service providers assessed their current business situation somewhat
less favourably than last month. There was also a clear downturn in
expectations, which nevertheless remained optimistic. Firms still plan to
recruit additional staff.
The Ifo Business Survey of the service sector is based on ca. 2,500 monthly
survey responses from firms in key segments of the tertiary sector, especially
business-oriented segments (excl. distribution, financial services, Leasing,
insurance and government). The survey is conducted and calculated in the same
way as the Ifo Business Survey of industry and trade. The indicator for the
Business Climate in the service sector has not yet been incorporated into the
Ifo Business Climate Index for industry and trade.
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