German business confidence defied expectations in August and increased slightly, according to a leading economic survey. Despite an expected drop in exports, businesses say they are planning to hire.
German exports have spurred economic growth
More good news for the German economy emerged on Wednesday as the Munich-based Ifo research institute announced another increase in the German business confidence index.
Ifo said its index rose by half a point from July to 106.7 points. A poll by Dow Jones Newswires had predicted a slight drop to 106 after last month's record increase of 4.4 points.
"The German economy remains robust," a statement quoted Ifo President Hans-Werner Sinn as saying.
The six-month outlook for manufacturing was "still very confident, though somewhat less so than in the previous month," the statement said.
Ifo releases the closely-watched German business confidence index monthly, and bases its score on a survey of 7,000 business executives in manufacturing, construction, wholesale and retail.
Sinn says the German economy is still in good shape
Official German second-quarter economic figures released on Tuesday increased optimism in the country, with the national statistical office confirming a 2.2 percent growth in gross domestic product - the country's largest since reunification in 1990.
German exports largely spurred the economic growth, as a weaker euro made selling easier and demand in the world's emerging economies surged by 8.2 percent in the second quarter.
However analysts expect growth to taper off in coming months as the growth of exports slows down and countries begin to unravel economic stimulus programs intended to ease effects from the recession.
Author: Andrew Bowen (AP/AFP/dpa)
Editor: Chuck Penfold