German business morale ticks up in December

[FRANKFURT] German business confidence unexpectedly rose in December, a key survey showed Friday, even as the country ends the year back under a new lockdown to curb a second coronavirus wave.

The Ifo institute's monthly confidence barometer rose to 92.1 points from 90.9 in November.

Analysts surveyed by Factset had expected the index to suffer a third consecutive dip.

"While the lockdown is hitting certain sectors hard, overall the German economy is showing resilience," Ifo president Clemens Fuest said in a statement.

Analysts said the buoyant mood probably reflected optimism about Covid-19 vaccines but the survey closed too early to properly gauge concerns about the latest round of shutdowns.

Europe's top economy earlier this week ordered schools and non-essential shops to stay closed until at least Jan 10.

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The tougher restrictions come after weeks of milder measures failed to halt a rapid rise in Covid-19 infections.

Germany on Friday reported more than 30,000 new coronavirus cases, its second-highest level ever, and 813 new deaths.

Ifo said managers were both more optimistic about their current situation and about Germany's economic outlook.

But it stressed that "a large majority" of the answers in the 9,000 strong survey were received before Germany announced its latest, tougher lockdown.

The survey showed that manufacturers were significantly more upbeat than last month, while the mood in the services sector was more mixed, with transport firms more optimistic than tourism and creative businesses.

"Don't get carried away by the stronger Ifo index," said ING bank analyst Carsten Brzeski.

LBBW bank economist Uwe Burkert said the survey was likely driven by "positive expectations" about the vaccine rollouts.

"It remains to be seen" if that confidence can be maintained into next month, he said.

"But from mid-2021, hope is justified that the economic situation will be significantly better than today."

AFP