By Marco Babic
ZURICH (MaceNews) – Business confidence in Germany improved for the third consecutive month, beating market expectations and showing German businesses are more optimistic about the future, the IFO Institute reported Monday.
The Ifo Institute’s Business Climate Index rose to 90.5 in July from a revised 86.3 (86.2) in June, beating the median forecast of 89.3 compiled by Econoday. Although within the forecast range of 88.5 to 91.3, the July result is the first time the index stood above 90 since February of this year when it was at 95.8.
Current conditions also improved, rising to 84.5 from 81.3, though were below the median expectation for an increase to 85.3. Even so, companies were “notably more satisfied” with the current situation than in previous months.
Commenting on the result, Ifo observed “companies were notably more satisfied with the current business situation” and “carefully optimistic” about the months ahead.
The improvement was evident in all the major sectors. Manufacturing “improved considerably” while the services sector “rose strongly” and is now showing a positive reading. The trade and construction sectors improved as well.
The expectations component rose to 97.0, to the best reading since November 2018 when it was 97.9. This firmly beat the median expectation of 93.4 and was also well above the highest forecast of 94.0.
Monday’s results show Germany’s economy “is recovering step-by-step,” Ifo President Clemens Fuest said in a statement accompanying the survey results.
The next release is scheduled for August 25 at 10:00am Central European Time.