A monthly survey of the German business climate hit its highest-ever level in October. It beat analysts' forecasts of a further fall and pointed to continued strong performance for Europe's largest economy.
The German business climate index, compiled and published by the Munich-based Ifo institute, reached 116.7 points in October, rebounding strongly from a decline in September and climbing to a monthly record. The index is closely watched because it's based on a survey of around 7,000 firms across Germany.
Judgements of both the present economic situation and their expectations for the coming months increased, with companies in the manufacturing industry, retail and construction all being more optimistic than in September. Confidence of wholesalers however fell slightly.
"Germany's economy is powering ahead," Ifo president Clemens Fuest said in a statement, adding that "companies are very optimistic about the months ahead."
Analysts surveyed by Factset had predicted a fall in the Ifo reading, after a complicated election outcome late last month left Chancellor Angela Merkel with the tricky task of building a four-party governing coalition in Berlin. But other conditions remain favorable for business, with economic growth picking up for Germany's neighbors and closest trading partners in the 19-nation eurozone and high levels of confidence among consumers at home.
Carsten Brzeski, economist of ING Diba bank said the index's October reading had definitely "washed away" earlier tentative signs that the economy was levelling off. "For the time being, the German growth party continues as if there was no tomorrow," he added.
uhe/nz (Reuters, AFP, dpa)