German business sentiment improved to the highest level in nearly three years in the run-up to Christmas, a closely watched survey revealed Monday.
The business confidence index rose to 111.0 in December from 110.4 in November, survey data from the Munich-based Ifo Institute showed.
The score was the highest since February 2014, when it was 111.1 and exceeded the expected level of 110.9.
On the basis of its past relationship with annual GDP growth, the BCI points to an acceleration from the third quarter's 1.7 percent towards 3 percent, suggesting that quarterly growth should far outpace third quarter's 0.2 percent in the fourth quarter, Jennifer McKeown, an economist at Capital Economics, said.
The current conditions indicator climbed to 116.6 in December from a revised 115.6 in the previous month. The indicator last logged a similar higher reading in February 2012.
Economists had forecast the reading to rise to 116.2 from November's initially estimated 115.9.
The business outlook for the first half of 2017 was also slightly more optimistic. The expectations index improved marginally to 105.6, in line with expectations, from 105.5 a month ago.
Among manufacturers, assessments of both the current business situation and expectations improved in December. More companies plan to ramp up production in the months ahead.
In wholesaling, the business climate index strengthened to its highest level in almost three years. This was primarily due to more favorable assessments of the business situation. However, wholesalers scaled back their optimistic expectations slightly.
While retailers assessed their current business situation slightly less favorably, their business expectations improved in December.
Since Germany's reunification business has never been better for contractors, Ifo said. Improved business expectations indicate that the boom will continue in the months ahead.
However, the mood deteriorated in the service sector in the run-up to Christmas. Service providers assessed their current business situation less favorably. They also scaled back their business expectations slightly.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Business News
