Germany: Business confidence ticks up in March
Business confidence rose to 96.6 in March, the highest print since June 2019, from 92.7 in February. That said, the index remained below the neutral 100-threshold that separates pessimism from optimism.
The improvement in the headline reading came on the back of a return to optimism regarding business expectations and less downbeat views on the current situation. Looking at sector-level data, manufacturing confidence rose further in the month, while sentiment in the services sector and in construction swung from pessimism to optimism for the first time since October and September, respectively. On the other hand, confidence in the trade sector remained in pessimistic territory although it recovered markedly from the prior month. This partly reflects the tough situation in retail amid lingering lockdown measures, which were recently extended until mid-April.
Clemens Fuest, president of the ifo Institute, commented:
Despite the rising rate of infections, the German economy is entering the spring with confidence.”
Carsten Brzeski, global head of macro at ING, added:
“If German authorities manage to get the vaccination programme moving, the second quarter could see an enormous turnaround in sentiment and lockdowns.”