Germany Business Confidence


Germany: Business confidence continues to rise in December on improving expectations

December 18, 2014

The business confidence index, elaborated by the Ifo Institute, rose from 104.7 in November to 105.5 in December, which met market expectations. Following the declines recorded between May and October this year, the index recovered some of the lost ground in November and December and now sits at the highest level in four months.

According to the Institute, October’s print reflected that firms were more optimistic regarding future business developments while their assessment of their current situations was unchanged over the previous month. The Ifo Institute noted that the outlook for the coming months improved as, “[d]ropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy.” In the manufacturing sector, business confidence improved again, reaching positive territory. While wholesaling businesses recorded a third consecutive rise in business confidence, confidence dropped for retail-sector firms. Confidence also fell slightly in the construction sector, but still remains at high levels.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to expand 2.1% in 2015, which is down 0.8 percentage points from last month’s forecast. In 2016, the panel sees investment growth decelerating 3.5%.

Author: Teresa Kersting, Economist

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Germany Business Confidence Chart

Germany Business Confidence December 2014

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

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