German business confidence at record high in December: Ifo

17th December 2010, Comments 0 comments

German business confidence has reached an all-time high, the Ifo institute said Friday as Europe's top economy headed for record growth in 2010.

The closely watched reading of sentiment climbed to 109.9 points in December from 109.3 points in November, an Ifo spokeswoman said, its seventh consecutive increase.

Analysts had forecast a very slight increase to 109.4 points.

A sub-index of expectations for the coming six months reached a record level as well, climbing to 106.9 points from 106.3 in November.

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

"In the course of the entire year 2010, the business climate index has risen sharply," Ifo president Hans-Werner Sinn noted in a statement.

"Following an increase in exports, investment in particular has been responsible for the upswing and the outlook is now even good for consumption," he added.

"Retailers have assessed their current business situation as very good. In addition, they are more optimistic regarding the next six months than in November," Sinn said.

The Ifo spokeswoman said its measure of how businesses in general assess their current position rose to 112.9 points, the highest level since April 2007.

The overall indicator underpinned expectations that the German economy will post record growth this year despite financial uncertainty fueled by the eurozone debt crises which has seen Greece and Ireland needing to be bailed out.

The German central bank estimates growth this year at 3.6 percent, the strongest pace since German reunification in 1990.

"The German economy is entering the New Year at full throttle as it is taking the next stage towards a self-sustained recovery," ING senior economist Carsten Brzeski said.

"There is hardly a better symbol for the impressive rebound of the German economy than the Ifo ending the year at a record high."

© 2010 AFP

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