Germany Business Confidence


Germany: Business confidence rises to record-high

February 21, 2011

Business sentiment rose to the highest level in two decades, on the back of businesses' better assessment of the current situation. The Ifo Business Climate index climbed to 111.2 points in February, up from the 110.3 points observed in January. The reading, which marked the ninth consecutive month of improving business sentiment, defied private sector analysts' expectations, which had seen the index remaining unchanged. The January reading reflected an improvement in both sub-categories of the business climate indicator. The business expectations component rose to 107.9 points, which marked the fourth consecutive month of improvement. The current business situation sub-component improved in January to 114.7 points, after having fallen the previous month to 112.8 points. In addition, the manufacturing sector reported a more favourable business sentiment on the back of improving prospects for export demand in the months ahead. Moreover, wholesale firms, as well as construction businesses reported a more positive business climate amid a better assessment of their current business situation. Only retail firms were less optimistic compared to the previous month, as businesses reported to be less satisfied with their current business situation.

Author:, Senior Economist

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