German business confidence hits record high in June - Ifo
German business confidence unexpectedly improved in June, hitting a new record high, according to a widely-followed survey.
The Ifo's business climate index rose to 115.1 from 114.6 the month before, marking its highest level since 1991 and beating expectations for a reading of 114.4.
The current assessment index increased to 124.1 from 123.3 in May, ahead of expectations for a reading of 123.2.
Meanwhile, the expectations index advanced to 106.8 in June from 106.5 the month before, surpassing a forecast of 106.4.
Clemens Fuest, president of the Ifo Institute, said: "Companies were significantly more satisfied with their current business situation this month. They also expect business to improve. Germany’s economy is performing very strongly."
The index for the manufacturing sector rose to 26.1 from 26.0 in May, while the construction index slipped to 12.4 from 12.8 and the wholesaling index increased to 23.6 from 20.3. The retailing index came in at 16.0 from 11.4 in May.
Capital Economics said: "June’s German Ifo survey suggests that the pace of economic growth will accelerate sharply in the months ahead. The rise in the headline business climate indicator from 114.6 to 115.1 was much better than the consensus forecast of a small fall to 114.4 and our own expectation of a slightly sharper fall. It also contrasted with the message from the German Composite PMI, which fell fairly sharply in June. On the face of it, the Ifo BCI now points to a pick-up in the pace of annual GDP growth from Q1’s 1.7% to as high as 4%."