The business climate in Germany reversed a bit last month after several months of decline. The news comes as a surprise as the balance of the continent slips into recession. According to Ifo:
The Ifo Business Climate Index for German industry and trade rose again. While companies as-sessed their current business situation as somewhat less favourable than last month, they were considerably less pessimistic about future business developments. As the year draws to a close, German companies are more confident about the future.
In manufacturing the business climate continued to brighten. Companies assessed their current business situation slightly less favourably than last month, but they are far more optimistic about the future than previously. Business expectations showed their sharpest increase since August 2009. Export expectations also continued to improve.
The business climate indicator weakened at both levels of trade. In both wholesaling and retailing survey participants were less satisfied with their current business situation and somewhat more sceptical about future developments.
In construction the business climate index continued to rise in December. While companies were more cautious in their assessments of the current business situation, they were far more optimistic about the next six months.
Douglas A. McIntyre