The mood of Germans, the PMI and business outlook of companies, and the gross domestic product (GDP) continue to defy the balance of Europe, and even the very modest improvements of similar indices in the United States. Germany may not have the GDP growth of China, but its people and businesses must feel more upbeat than their counterparts in the People’s Republic, where, by the standards of the past decade, the economy has slowed.

Research firm GfK reports:

The mood of consumers in Germany continues to improve as a heat wave hits this summer. In July, the indicator values for economic and income expectations as well as willingness to buy all increased on the previous month’s figure. Consequently, the overall indicator is forecasting 7.0 points for August fol-lowing a value of 6.8 points in July.

The economic expectations of German consumers increased for the third consecutive month in July, improving by 3.2 points. The indicator is therefore currently at 4.3 points and stabilizing at a positive level, above the zero threshold which signifies the long-term average.

To keep its momentum, Germany has to rely to a great extent on the success of its neighbors, because of their substantial trade relationship. But Europe may have regained a pulse, based on the latest unemployment and GDP data. However, Germany’s exports to the United States are also part of its trade activity. If the Chinese economy slows as much as some analysts expect — say to 4% — Germany may have no means to keep up its recovery.

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