Optimism abounds among German executives: Survey
Germany's leading measure of business confidence, the Ifo institute index, surged to a five-year high this week, raising hopes of stronger growth in Europe's largest economy.
The Munich-based institute's widely-watched business climate index registered its largest monthly increase since 1999 in September, with executives' assessment of both current conditions and expectations for the next six months improving markedly.
Ifo economists said the unexpectedly strong improvement came as easing oil prices and the euro's 12% slide against the dollar since January have brightened the outlook for German exporters.
There were signs, too, of an improvement in the domestic outlook, with executives in the building, wholesale and retailing sectors also more optimistic, said Ifo chief Hans-Werner Sinn.
"The surveyed firms again gave a noticeably better assessment of their current situation than in September, and also their business expectations for the next six months were more favorable," Sinn said in a statement.
He added: "The economic recovery seems to be on firmer ground."
The latest Ifo report came after another survey showed German investor confidence improving in October and a report from Germany's DIHK chamber of commerce predicted accelerating economic growth and the likely end of big job cuts by corporations.
The surprise jump in the Ifo also came against the backdrop of moves by Germany's two largest parties to forge a power-sharing "grand coalition" government, ending the political gridlock in the country following last month's inconclusive national election.
The Ifo index is a survey of 7,000 German business executives' assessments of current economic conditions and their expectations for the German economy in the next six months.
It is not, however, an indication of actual economic growth, which Germany's six leading economic forecast at a modest 0.8% for this year.
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