German business sentiment rises for the sixth consecutive month, Ifo says
EWG•Germany’s Ifo business climate index rose to 90.2 in October from 89.9 in September, above analysts’ forecast of 90.0. Expectations increased to 91.6, while the current conditions index fell to 88.8 from 89.5.
1. Expectations improve
The Ifo Institute’s business climate index rose for a sixth consecutive month in October as companies grew more optimistic about the outlook. The expectations index climbed to 91.6 from 90.4 in September, while the current conditions index fell to 88.8 from 89.5.
2. Outlook remains mixed
The improvement in sentiment was attributed entirely to manufacturing, where strong orders and the effects of the government’s infrastructure fund were boosting confidence. Sentiment weakened in services, which VP Bank economist Thomas Gitzel linked to subdued consumer spending. Economists polled by Reuters expect German GDP to grow 0.1% quarter-on-quarter in the third quarter, while Capital Economics expects the economy to have stalled before returning to growth in the fourth quarter.
