German business confidence rebounds after six months of decline
Perhaps the most closely watched gauge of German business confidence broke a string of six consecutive declines in November.
The IFO institute’s German business climate index rose to a reading of 104.7 points in November, the lowest in 18 months, following a reading of 103.2 for the prior month.
“With positive responses to the survey questions outweighing the negatives by only 2 percentage points, the index is a long way from sending a strong signal about conditions in the German economy,” Daiwa Capital Markets wrote in reaction to the data.
Be that as it may, it was still better than economists’ forecasts, which had been calling for a print of 103.
The improvement was led by better sentiment in wholesaling and retailing, although a sub-index linked to manufacturer’s confidence also rose, to 3.9 from 1.5 in October, with firms said to be expecting “further stimuli” from export business.
A sub-index measuring businesses’ expectations increased to 99.7 from 98.3, while another which tracks firm’s appraisal of the current situation advanced to the 110 point mark, from 108.4.
In its statement however, IFO adopted a cautious tone, describing the readings for businesses’ assessment of the current situation as only “slightly more favourable than the month before”.
The prestigious think-tank added “the downturn in the German economy has ground to a halt, for the moment at least”.