BERLIN: German business morale brightened more than expected in April, hitting its highest in nearly six years, a survey showed on Monday, suggesting Europe’s largest economy is set to carry its robust upswing into the second quarter of this year.
The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, rose to 112.9 from an upwardly revised 112.4 in March.
The reading, the highest since July 2011, came in stronger than a Reuters consensus forecast for a value of 112.5.
“The German economy is growing strongly,” Ifo chief Clemens Fuest said in a statement.
Ifo economist Klaus Wohlrabe said that the German economy was not being influenced by political uncertainties such as the threat of rising protectionism, major elections in Europe and the course of Brexit negotiations.
The survey was conducted in the first half of April, meaning it did not include any reaction to the first round of the French presidential election on Sunday in which centrist Emmanuel Macron came in first, qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.
Managers’ assessments of the current business situation improved significantly while their outlook for the coming six months was a bit less optimistic, it showed.
Morale improved in construction, retailing and wholesaling whereas managers in manufacturing were somewhat less upbeat.
In construction, assessments of the current business situation rose to a new record high while expectations remained broadly positive and the order level was excellent, Ifo said.
“The Ifo index continued its recent surge in April, increasing for the third consecutive month, suggesting that Germany’s golden cycle has entered yet another round,” ING economist Carsten Brzeski said. “The only weak spot of the German economy remains rather sluggish investment,” he noted.
— Reuters
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