Germany Business Confidence September 2016


German business confidence surprises, jumps to over-two-year high in September

German businesses turned much more optimistic in September. The business confidence index, elaborated by the Ifo Institute, increased from August’s 106.3 to a strong 109.5. The result marked the highest reading in 28 months and contrasted market expectations of the index remaining at August’s subdued level.

According to the Institute, the improvement mainly reflects that firms turned more optimistic about future business development. In fact, the respective sub-indicator hit a ten-month high. Companies were also more positive about their current business situation.

The Ifo Institute commented on September’s print that, “the German economy is expecting a golden autumn.” Sentiment rose across all sectors: strengthening sentiment in the manufacturing sector was broad-based, as most key components turned more optimistic and the mood in the construction sector reached yet another record-high. Wholesalers and retailers also became more positive following August’s slump.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 2.5% in 2016, which is down 0.2 percentage points from last month’s forecast. In 2017, the panel sees investment growth accelerating 1.8%.

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Germany Business Confidence Chart

Germany Business Confidence September 2016

Note: Ifo Business Climate Index, 2000=100.
Source: Ifo Business Survey.

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