German business confidence rises in September
27 September 2005, MUNICH - German businesses have shrugged off both higher oil prices and a political stalemate in Berlin, with their confidence rising in September, according to the closely watched monthly IFO survey released Tuesday.
27 September 2005
MUNICH - German businesses have shrugged off both higher oil prices and a political stalemate in Berlin, with their confidence rising in September, according to the closely watched monthly IFO survey released Tuesday.
The Munich IFO economic research institute said its business climate index rose to 96.0 after falling in August to 94.6.
Most experts had been expecting the index to head further downwards this month after the centre-right parties lost their commanding campaign lead and failed to win the election September 18.
An IFO economist, Klaus Abberger, said the more hopeful outlook among 7,000 executives and experts surveyed indicated a business recovery this autumn. He said about 80 per cent of responses were obtained before the general election.
IFO head Hans-Werner Sinn said responses after that date had tended to be somewhat more pessimistic.
Abberger added that world oil prices were only rarely an issue for business-people but clearly perturbed consumers and were possibly hurting retail sales. Crude oil prices have nudged a record USD 70 a barrel for much of this month.
The survey found companies were more satisfied with their current business situation - this sub-section of the index jumped from 93.8 to 96.4 - whereas their separately tracked expectations for the next half a year had not changed greatly since August.
Categorized by sector, optimism rose in industry and retailing, but showed little change in construction.
Abberger said the figures were in line with IFO's forecast that the German economy will grow 0.8 per cent this year.
One of Germany's biggest banks, Commerzbank, said growth in Germany was coming from strong exports, not domestic sales.
"A self-sustaining recovery is nowhere in sight," it said in a comment on the IFO figures. Commerzbank said it found encouragement in the fact that business was largely unfazed by the world price of oil and recent warnings that the world economy may be slowing down.
Wolfgang Clement, the caretaker German economics minister until a new coalition government is sworn in, said the IFO index showed that the dip in growth in the second quarter of this year had been overcome.
Subject: German news