German Business Confidence Rises to 2 ½ Year High: Ifo
Business confidence in Germany rose to the highest level in two-and-a-half years, a sign Europe’s largest economy is on track to grow faster in the first quarter.
The business climate index, courtesy of the Munich-based CESifo Group, rose from 110.6 to 111.3 in February, exceeding forecasts. February marked the fourth consecutive month business morale rose in Germany. Based on a survey of 7,000 companies, the business climate index is closely monitored by the financial markets.
The assessment of the current business climate was significantly higher than the previous month, suggesting businesses are cautiously optimistic about recovery. The current assessment index rose 2 points to 114.4. Confidence in future business expectations eased slightly, but remained high. The gauge of business expectations fell 0.6 points to 108.3,Ifo data showed.
“The Ifo Business Climate Index for industry and trade in Germany continued to rise in February,” Ifo President Hans-Werner Sinn wrote in a press release. “The German economy is holding its own in a changeable global climate.”
Business confidence continued to brighten in the manufacturing sector, where assessments of the current situation rose steadily. After rising sharply in January, business expectations among wholesalers decreased slightly, thanks to a poor assessment of the future. Business sentiment in the retail sector rose significantly, with the current situation index rising to the highest level since early 2012.
German business activity continued to drive Eurozone recovery in January, according to market research firm Markit Group. Germany is expected to anchor Eurozone recovery in 2014, amid signs of slower progress in France and Spain, the currency region’s second- and third-largest economies respectively.
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