By Marco Babic
ZURICH (MaceNews) – Improved current economic conditions and expectations pushed overall economic sentiment in Germany higher in December, even with increased lockdown measures due to COVID-19.
The Ifo Business Climate Friday rose to 92.1 in December from a revised 90.9 (90.7) the previous month, and was well above the median forecast of 90.5 in an Econoday survey of economists. The result also exceeded the high forecast of 92.0.
Unlike the previous month when expectations rose and current conditions fell, in December both components showed improvement as “companies were more satisfied with their current business situation,” Clemens Fust, president of the Ifo Institute said in a statement.
Expectations for December rose to 92.8 from 91.8 (91.5) the previous month, beating the median forecast for 92.5, and within range of forecasts from 90.0 to 94.2. This shows that German companies are less skeptical about developments over the next six months.
Current conditions improved to 91.3 from an unrevised 90.0 in November, beating both the Econoday survey median of 89.0 and the high forecast for 90.
Germany’s manufacturing sector showed marked improvement in December, according to Ifo to their best reading since January, with particular strength in the chemical and mechanical engineering sectors.
The manufacturing improvement had spillover effects into the trade sector where “expectations also brightened somewhat”, driven primarily by wholesalers serving the manufacturing sector, the report said.
Earlier in the month, the ZEW Institute reported The Index of Economic Sentiment for Germany rose 16.0 points to 55.0 in December, well above the median forecast of 46.0 in an Econoday survey.
Ifo will publish January Economic Confidence on Monday, January 25.
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Contact this reporter: marco@macenews.com.
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