German business upbeat

25th November 2003, Comments 0 comments

25 November 2003 , MUNICH - German business confidence rose for the seventh consecutive month in November, a survey of 7,000 executives released Tuesday showed, adding to optimism that Europe's biggest economy is now firmly on track to recovery. The Munich-based Ifo economic institute said its headline index for western German business sentiment rose to 95.7 points in November from a upwardly revised 94.3 points in October. The closely watched index stood at 92 points in September. Analysts had predicted t

25 November 2003

MUNICH - German business confidence rose for the seventh consecutive month in November, a survey of 7,000 executives released Tuesday showed, adding to optimism that Europe's biggest economy is now firmly on track to recovery.

The Munich-based Ifo economic institute said its headline index for western German business sentiment rose to 95.7 points in November from a upwardly revised 94.3 points in October.

The closely watched index stood at 92 points in September.

Analysts had predicted that the index, which is one of Europe's prime economic indicators, would rise to 95 in November as executives shook off worries about the impact of a strong euro on exports, the on-going debate about German economic reform and renewed concerns about terrorism.

The rise came against the backdrop of a surge in the euro to an all-time high of nearly 1.20 dollars, devastating bomb blasts in Istanbul and parliamentary moves to consider Chancellor Gerhard Schroeder's economic package of tax cuts and labour market reform.

As a further sign of the growing optimism in German industry, Ifo President Hans-Werner Sinn said that the seven consecutive monthly increases in the index represented the longest period of rises since 1999.

The improvement in the business confidence index in western Germany signals the recovery is advancing, said Sinn.

The pickup in growth in the U.S. and Asia now seems to be benefiting Germany, analysts said. Exports have emerged as the key driving force in Germany.

In the third quarter, exports rose by 3.2 percent quarter-on- quarter, helping to haul Germany out of three years of economic stagnation and offset sluggish domestic demand.

Crucially, the rise in the Ifo's headline November index was driven by increases in the executives' assessment of both current business conditions and future expectations.

The institute said sentiment improved markedly in manufacturing as well as the nation's hard-pressed construction sector.

While the executives' assessments of current conditions rose to 83.2 in November from a revised 81.2 in October, their expectations of future business conditions increased to 198.7 from 107.9.

Further adding to hopes that Germany might end the year on a positive economic note, analysts said that the current business component of the index was now at its highest level since just before the 11 September terrorist attacks on the US.

The ifo index is one of a string of key economic sentiment surveys and reports to be released for the 12-member eurozone this week and coincided with the publication of figures from France showing an unexpected rise in consumer spending on manufactured goods.

The October data showed consumer spending in the currency bloc's second biggest economy increasing by 0.6 percent in October.

 

DPA
Subject: German news



 

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