German business confidence, measured by the Ifo index, rose for the second month in a row in June as the industrial outlook brightened further. But there is still a gap between current business and future expectations.
Ifo's business sentiment index rose to 105.9 points in June from 105.7 points in March, showing a second consecutive month of gains, the Ifo economic think tank announced Monday.
The subindex measuring future expectations grew by almost one point from 101.6 points in May to 102.5 points now, Ifo said. The gain was prompted by improving prospects for the manufacturing sector, especially for the automobile industry, as well as by rising exports.
The current business situation, however, was viewed less positively by the about 7,000 company representatives polled by Ifo. The subindex on this slipped to 109.4 points in June from 110 points in May.
Nevertheless, Ifo chief economist Kai Carstensen described the June index as an indication that the German economy was holding its course.
In other comments, Jörg Zeuner, chief economist of state-owned KfW bank told Reuters news agency that he expected Europe's largest economy to continue recovering from a drop in output at the end of last year.
After German economic output fell 0.3 percent in the final quarter of 2012, growth rebounded modestly at a rate of 0.1 percent in the first three months of 2013 and is expected to have accelerated between March and June.
The German economy isn't immune to outside risks, however, the ING analyst Carsten Brzeski told Reuters. The primary risks to German growth this year would remain economic stagnation in the eurozone, notably in France, as well as a hard landing of the Chinese economy that would reverberate throughout the world.
uhe (Reuters, AFP, dpa)