BERLIN- German business morale rose more than expected in December to hit a six-month high, in a further sign that Europe’s largest economy is showing resilience overall despite a manufacturing crisis.
The Ifo institute said its business climate index rose to 96.3 in December from an upwardly revised 95.1 in November. The December reading was the highest since June and beat a Reuters consensus forecast of 95.5.
“The German economy is heading into the New Year with more confidence”, Ifo President Clemens Fuest said in a statement, adding that both companies’ assessment on their current business conditions and outlook for the coming six months improved.
The figures suggest that the German economy grew by 0.2% in the fourth quarter, Ifo economist Klaus Wohlrabe told Reuters, adding that the industrial sector nonetheless remained in recession and would emerge only slowly from that downturn.
The German economy has been going through a soft patch as its export-oriented manufacturers struggle against a backdrop of trade disputes, a struggling car industry and uncertainties over Britain’s planned departure from the European Union.
The economy expanded by just 0.1% in the third quarter, narrowly avoiding recession, which economists usually define as two consecutive quarters of negative growth.
Ifo said manufacturers were more optimistic about their business outlook for the next six months, though their assessment of the current situation worsened a little.
The closely watched Ifo business climate index is based on surveys of around 9,000 firms in the manufacturing, service, trade, and construction sectors.
(Content and photos syndicated via Reuters)
