• Germany's news in English
 

Business confidence at seven-month high

Published: 25 Jan 2013 11:35 GMT+01:00

The Ifo institute's closely watched business climate index for Europe's top economy rose to 104.2 points in January – its highest reading since June – from 102.4 points a month earlier.

Economists polled by Dow Jones Newswires had been pencilling in a more modest rise to 103.0 points. "The German economy made a promising start to the new year," said Ifo president Hans-Werner Sinn.

"The Ifo business climate rose for the third time in succession. Assessments of the current business situation were somewhat more positive after deteriorating last month. Future business prospects improved considerably," Sinn said.

Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.

The sub-index measuring current business rose to 108.0 points in January, making good the slight decline seen last month. And the outlook sub-index jumped to 100.5 points, its highest reading since May.

"The German economy has put the crisis behind it," said Berenberg Bank economist Christian Schulz.

"Germany is roaring back to growth in the new year 2013." Official gross domestic product (GDP) data showed that Germany turned in its weakest growth in four years in 2012, with an estimated contraction of around 0.5 percent in the fourth quarter alone.

But there is growing consensus that the dip in growth will prove shortlived.

Already earlier this week, the ZEW investor sentiment index soared to the highest levels since the start of the eurozone debt crisis in 2010 as the German economic outlook looks ever brighter.

And on Thursday, another forward-looking indicator, the purchasing managers' index (PMI), notched up its strongest growth in a year. "Signs are growing that the German economy could be heading for a V-shaped rebound in the first quarter of 2013 after output contracted in the fourth quarter of last year," Schulz said.

"The confidence rebound may still take some time to feed through to hard data such as industrial production, but the fact that all surveys (PMIs, ZEW) and financial indicators point in the same direction inspires confidence in an economic rebound," the expert said.

According to the Ifo data, almost all sectors of the economy experienced a boost, with industry, services and construction leading the way.

Schulz believed that Germany is "heading for another extended growth period. This will also help its eurozone partners to export their way out of trouble."

"The crisis is over – at least in Germany and at least if one believes in the forecasting power of the Ifo," said ING Belgium economist Carsten Brzeski.

"All in all, today's Ifo index nicely illustrates the green shoots in the German economy. Even if the current harsh winter weather might delay the blossoming out somewhat, growth should return, leaving the contraction of the fourth quarter quickly behind," he said.

But Capital Economics economist Ben May was not quite so optimistic.

"January's rise in the Ifo survey provides further hope that the estimated sharp fall in fourth-quarter GDP will be a one off," he said.

"Nonetheless, given that the effects of the recent appreciation of the euro are unlikely to have been fully felt by exporters, it is too early to conclude that Germany will record a strong and sustained expansion in 2013," May cautioned.

AFP/jcw

The Local (news@thelocal.de)

Your comments about this article

14:10 January 25, 2013 by Berlin fuer alles
Give me a break. This is a tiny difference on what was expected over the holiday spending spree. Trying to put a spin on things after the recent election disaster for Dr. Merkyl and Mr. Hyde is all that is happening here. The real stats will come in soon taking in the first quarter of 2013 and it will not make nice reading. Who writes this rubbish anyway? Dr. Merkyl and her cronies are just clasping at straws here knowing full well the real picture is very gloomy. Real wages will fall further and more austerity will be necessary in Germany. Can always get BILD to blame it on the Greeks again though. That might work with the proletariat.
17:24 January 25, 2013 by smart2012
Bfa, let those guys talk. GDP Q4 12 -0.5%. They are now pushing services and construction to bridge the most important data of German economy, ie manufacturing index. And as you can read in January manufacturing index is still below 50, which means contraction.

Yes, Verkel propaganda, but no worry, Germany has already shown in 2012 that it cannot stand alone, as it is too dependent on export (and this has been already highlighted as an issue by eu commission last month)
18:05 January 25, 2013 by Tonne
Oh no, not the green shoots again! Carsten Brzeski should have a word with Norman Lamont about the irresponsibility of such talk - especially in mid-winter.
19:40 January 25, 2013 by Englishted
Well thats alright then because I have been laid off work again ,third time in 12 months ,boom times are always just around the corner ,bullshine.
00:12 January 27, 2013 by smart2012
Englishted, sorry for u. I am moving to Singapore in march, to the real booming atea. If u r interested to follow let me know ;)
Today's headlines
JobTalk Germany
Graduates desperate to work for car giants
BMW are the most attractive employer for business and engineering graduates. Photo: DPA

Graduates desperate to work for car giants

A survey published on Monday shows that the car industry is the most attractive place of work for German business graduates and engineers alike. READ  

Language fails
Minster wows crowds with Denglisch
Gerd Müller, left, with UN Secretary General Ban Ki Moon to his right. Photo: DPA

Minster wows crowds with Denglisch

Development Minister Gerd Müller recently captivated crowds at the Global Citizen Earth Day in Washington, D.C. with his enthusiastic - if erratic - English. The speech has since gone viral. READ  

Arms firms struggle to meet ethics mark
A Leopard 2 tank made by Germany's Krauss-Maffei Wegmann. Photo: DPA.

Arms firms struggle to meet ethics mark

A report released on Monday by Transparency International UK found that German arms companies had a spotty record in their ethics and anti-corruption programmes. READ  

Chancellor's office 'knew' of US economic spying
An 18-meter-across satellite dish at the BND's Bad Aibling listening post. Photo: DPA

Chancellor's office 'knew' of US economic spying

Chancellor Angela Merkel's office has known since 2008 of US economic espionage targeting European companies such as Airbus but did not react, Bild said Monday, citing intelligence agency documents. READ  

Munich toddler safe after late-night adventure
Munich streets in the dead of night. Photo: DPA

Munich toddler safe after late-night adventure

A two and a half year-old toddler was found wandering through the streets of Munich by police in the early hours of Monday morning. Luckily he was return unharmed to his relieved parents. READ  

Public pitch in to find refugee home arsonists
A set of keys found at the scene of the crime. Photo:DPA

Public pitch in to find refugee home arsonists

After police made a public appeal for information in the arson attack on a refugee home on a television programme on Sunday evening, more than 30 members of the public got in touch. READ  

Greece crisis
Merkel and Tsipras have 'positive' phone chat
Merkel and Tsipras meet in Brussels on 23 April. Photo: DPA

Merkel and Tsipras have 'positive' phone chat

Athens will resume talks with its creditors Monday, a Greek government source said, after Prime Minister Alexis Tsipras spoke on the phone with Chancellor Angela Merkel. READ  

Bayern stroll to 25th Bundesliga title
Bayern coach Pep Guardiola on the sidelines against Hertha on Saturday. Photo: DPA

Bayern stroll to 25th Bundesliga title

FC Bayern Munich found out they had won the Bundesliga title with four games to spare when their only rivals Vfl Wolfsburg lost 1-0 to Borussia Mönchengladbach on Sunday. READ  

Government knew of threat to Ukraine flights
Investigators at the scene of the MH17 crash in eastern Ukraine in mid-April 2015. Photo: DPA

Government knew of threat to Ukraine flights

Berlin knew the risks of flying over war-torn east Ukraine before Flight MH17 was shot out of the sky last year but did not inform German airlines, media reported on Sunday. READ  

Pro-Kremlin bikers defy bans on Berlin ride
Photo: DPA

Pro-Kremlin bikers defy bans on Berlin ride

Dozens of bikers from pro-Kremlin gang the Night Wolves on Saturday set off on a ride to Berlin ahead of the anniversary of Soviet victory in World War II, despite Poland and Germany barring the riders. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Features
Smart kids all want to work for BMW
National
Arms firms get a 'must do better' mark on ethics
Sport
Bayern's anticlimactic 25th Bundesliga win
Gallery
German beer day: take the tour
Features
Off to Norway at 18 km/hour
Shutterstock
Sponsored Article
10 things you didn’t know about Zagreb (and why you should go)
Gallery
The smileys Germans love to text
Sponsored Article
What expat parents should ask before choosing a school
National
Expats face Monday deadline to register to vote for UK election
Politics
A Greek learning politics in Germany
Features
The battle of the "Gates of Berlin"
National
Germany's favourite baby names of 2014
National
Germany's 'very poor' lobbying record
National
VIDEO: Mario Draghi suffers anti-ECB confetti attack
Politics
Merkel's 15 years at the top of German politics
Features
Spice up asparagus season with The Local's serving suggestions
Travel
Lowest of the low: how woman exploited Germanwings crash
Sport
Football and the €30,000 firework
Technology
Why scientists oppose killer robots
National
Germanwings co-pilot 'searched suicide info'
Technology
Electrifying 'Ostalgia'
National
Which city is Germany's worst for drivers?
National
'Cannibal cop' gets 8 years
Can the 'nightmare' of a pilot downing a plane be prevented?
National
LIVE: Co-pilot suspected of crashing plane
Pupils mourn lost classmates
National
Freed after 25 years on death row
National
Cologne Cathedral returns from space
Features
Paddy's Day, Berlin style
Is your workload 'out of control'? You're not alone...
National
Why east Germans are happy to get it on on camera
National
What would you do with a 250-year-old pretzel?
Features
Just why is the German flag Schwarz, Rot, Gold?
Business & Money
Getting German workers and bosses thinking positive
National
Uplifting thoughts to get you through the last week of winter
National
Who wants the Olympics more - Hamburg or Berlin?
National
Last-minute drama of Germany's Eurovision 2015 entry
National
German photographer takes world's top prize
Features
Meet the woman getting Germans to drink more – and better – beer
Gallery
Get inspired for International Women's Day with German heroes
Green party proposes first-ever cannabis legalization plan
Gallery
In pictures: Germany's seven most livable cities
National
Singapore canes Germans for train graffiti
Politics
Surprise! Germans love feeling like they run the EU
Politics
Anger over plan to show women what men earn
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

7,170
jobs available
Toytown Germany
Germany's English-speaking crowd
?>