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German business morale hits six-month high: survey
GERMAN business morale rose more than expected in December to hit a six-month high in a survey released on Wednesday, suggesting that Europe's largest economy picked up steam in the fourth quarter despite a persistent manufacturing crisis.
The Ifo Institute's business climate index rose to 96.3 in December from an upwardly revised 95.1 in November. The December reading was the highest since June and beat a Reuters consensus forecast of 95.5.
"The German economy is heading into the New Year with more confidence," Ifo president Clemens Fuest said in a statement, adding that companies' assessment of their current business conditions and their outlook for the coming six months had both improved.
The figures suggest that the German economy grew by 0.2 per cent in the fourth quarter, Ifo economist Klaus Wohlrabe said.
But the industrial sector nonetheless remained in recession and would recover only slowly, he added.
The German economy has been going through a soft patch as its export-oriented manufacturers struggle with trade disputes, problems in the car industry and uncertainties over Britain's planned departure from the European Union.
The economy shrank by 0.2 per cent in the second quarter and expanded by just 0.1 per cent in the third quarter.
The government has lowered its forecast for economic growth in 2020 to one per cent from 1.5 per cent, and predicts growth of just 0.5 per cent for this year.
Manufacturing companies were more optimistic about their business outlook, though their assessment of the current situation worsened a little in December, Ifo said.
German exporters welcomed signs that the trade conflict between the United States and China was easing, while Britain's election result increased clarity about Brexit, Mr Wohlrabe said. REUTERS