German business confidence at record high: Ifo

21st January 2011, Comments 0 comments

German business confidence has reached another all-time high, the Ifo institute said Friday, providing some good news for the 17-nation eurozone as it grapples with a dogged debt crisis.

Ifo's widely watched reading of business sentiment climbed to 110.3 points in January from 109.8 points in December, an Ifo spokeswoman said, its eighth consecutive increase.

It was also the second straight record high since the country's reunification in late 1990, even though the December level was revised slightly lower from an initial reading of 109.9 points.

Ifo surveys around 7,000 German manufacturing, construction, wholesale and retail companies each month to establish the index of business sentiment.

"The firms are just as satisfied with their current business as they were in December, and they have given more favourable assessments of their business prospects for the coming half year," Ifo president Hans-Werner Sinn said in a statement.

"The German economy has started the year with great vigour," he added.

Analysts polled by Dow Jones Newswires had forecast a more modest increase to 110 points.

The German government has forecast economic growth of 2.3 percent this year, following a post-reunification record of 3.6 percent in 2010, which should boost demand for goods from debt-laden eurozone neighbours.

Ifo also polls companies about their expectations for the coming six months, with this index climbing to a record 107.8 points from 106.8 in December, easingly beating analyst forecasts for 106.5 points.

© 2011 AFP

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