• 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
Hamburg districts make UNESCO heritage list
An eightfold composite picture of different views of the Chilehaus (Chile House) and the Sprinkenhof in Hamburg. Photo: EPA/Christian Charisius/dpa/picture alliance

Hamburg districts make UNESCO heritage list

The UN cultural agency on Sunday designated Hamburg's historic maritime warehouse and business districts, boasting early 20th century German brick architecture, as World Heritage sites. READ  

Germany's AfD heads right with new leader
Frauke Petry, the new leader of the AfD. Photo: Lukas Schulze/picture alliance/dpa

Germany's AfD heads right with new leader

Germany's Alternative for Germany (AfD) party ousted its co-founder and frontman Bernd Lucke on Saturday to elect a new leader from its right wing, signalling a shift in focus to immigration from its anti-euro origins. READ  

Extreme heat causes Autobahn to rupture
A fissure on the Autobahn near Heidelberg. Photo: DPA

Extreme heat causes Autobahn to rupture

The heatwave sweeping across the country may have Germans flocking to the sea this weekend, but the extreme temperatures are also causing Autobahns to break apart. READ  

Nazi island resort to be turned into luxury flats
Photo: Wikimedia Commons

Nazi island resort to be turned into luxury flats

A vast Nazi mega-complex meant as holiday homes for German workers and later used by the Soviets as a Cold War barracks is about to be turned into luxury flats. READ  

Greece crisis
'Bundestag must vote on new bailout': Schäuble
A poster of German Finance Minister Wolfgang Schäuble in Athens reads "For five years he has sucked your blood. Now tell him NO." Photo: DPA

'Bundestag must vote on new bailout': Schäuble

UPDATE: Finance Minister Wolfgang Schäuble said on Friday that there would be no quick release of bailout funds to Greece after the country's referendum on whether to accept its creditors' terms on Sunday. READ  

Activists give Dalai Lama 80th birthday stamp
The new Deutsche Post stamp showing the Dalai Lama. Photo: DPA

Activists give Dalai Lama 80th birthday stamp

Pro-Tibet activists have created a new limited-edition stamp featuring the Dalai Lama to mark the Tibetan spiritual leader's 80th birthday. READ  

Women's World Cup
'Germany will crack England': top coach
Star striker Celia Sasic. Photo: DPA

'Germany will crack England': top coach

The manager of European champions FFC Frankfurt told The Local he expects Germany to beat England in the third place play-off in the Women's World Cup, and predicted his protege Celia Sasic will grab a goal or two. READ  

NSA surveillance scandal
Calls grow for govt to act on NSA spying
Chancellor Angela Merkel, the highest-profile German victim of NSA spying, speaking on the phone. Photo: DPA

Calls grow for govt to act on NSA spying

Green Party security expert Konstantin von Notz told The Local on Friday that Chancellor Angela Merkel is failing to restore faith in the German-US partnership following fresh spying revelations. READ  

Germany reach semis of beach volleyball worlds
Ilka Semmler and Katrin Holtwick. Photo: DPA file

Germany reach semis of beach volleyball worlds

Germany's top beach volleyball pair are storming the world championships in Holland and prepare to face Brazil in the semis on Friday. READ  

Environment minister blasts Merkel, colleagues
Environment Minister Barbara Hendricks. Photo: DPA

Environment minister blasts Merkel, colleagues

Environment Minister Barbara Hendricks loosed a broadside against her cabinet colleagues on Friday in a guest article for Die Welt, saying that they had decided to do too little to reduce carbon dioxide (CO2) emissions in a way that would cost too much. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Police seize pensioner's WW2 heavy weapons haul
National
How to survive the Europe-wide heatwave
Sport
Is Schweini already out of the door at Bayern?
Politics
How German media shaped the Greece crisis
National
Car assembly robot crushes worker at Volkswagen
Rhineland
Weathermen red-faced over heatwave snow warning
Society
An eye for an eye? Mum protects child in playground with pepperspray
National
As it happened: Queen Elizabeth's final day in Germany
National
As it happened: Queen Elizabeth's second day in Germany
National
Queen Elizabeth II's first day in Germany - as it happened
National
Bus passengers tell fake racists where to get off
Politics
What's really in the Queen's handbag?
National
Germans say USA doesn't respect freedom
National
Yes, you CAN buy adult e-books before 10pm in Germany
VIDEO: Watch a 93-metre turbine crash to earth in slow motion
Gallery
Who's got a shot at the German Film Awards
Rhineland
Anger over 'child-free' beer garden
National
How do you do, Majestät?
National
Man defends right to pee in public with tear gas
Features
The Germans who won Waterloo for the British
Frankfurt
Should Germany ban circus animals?
Hamburg
Where people are having the most sex in Germany
Culture
Who Wants to be a Millionaire? Not this student...
National
Dresden's three-decade-long red light
Politics
Upper house calls for gay marriage now
Berlin
Berlin named 3rd-best city worldwide
Sport
In search of the toughest firefighter
Business & Money
German firms shine for European engineering students
Gallery
Hitler's paintings up for auction
National
German's 70-year search for murdered US pilot
Politics
What the G7 leaders agreed at Elmau
Business & Money
What really makes Germans happy
National
Playmobil builder leaves worldwide legacy
National
The car share that became a drug run
Politics
What Snowden revealed to Germany
Rhineland
Why wolf cubs are being raised by hand
National
Hitler's booze cave found
National
Environment makes Germany worth living in
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

6,912
jobs available
Toytown Germany
Germany's English-speaking crowd