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German business climate sentiment rises for 2nd month

German business climate sentiment rises for 2nd month

Business sentiment in Germany unexpectedly rose a second month in a row according to a closely watched survey released Tuesday, beating expectations _ although the results showed concern about the months ahead.
Munich's Ifo institute said its business climate index from February rose to 104.1, up from 103.4 in January and above the 102.8 forecast by analysts polled by Dow Jones Newswires.
But despite the pickup in the survey, which polled 7,000 companies, the group's subindex measuring expectations for the next six months fell to 98.2 points from 99.0 in January, a signal that there is still concern about the possibility of a global slowdown should the U.S. go into a recession.
"The economic situation of German industry and trade is robust, but the expectations continue to point to a cyclical weakening," said Hans-Werner Sinn, President of the Ifo Institute.
Despite the back-to-back increases, analysts said it was still too early to say if the measured improvement was a trend.
"One more rise in the business climate and the rule of thumb would suggest a trend reversal," UniCredit analyst Alexander Koch wrote in an e-mail. "But we don't think it is as easy as that. The German economy is definitely sailing in choppy waters."
Timo Klein, a senior economist with Global Insight, said the survey's results do show some worry, particularly among exporters "which now shows more signs of being impacted by the lasting high levels of the euro."
"Confidence among wholesalers also increased, albeit only moderately, whereas business climate in the manufacturing sector declined modestly as January's expectations increase was unwound," he said.
Earlier Tuesday, the government reported that economic growth in the country fell by more than half in the final three months of 2007, even as its exports kept supporting the economy.
The government's Federal Statistics Office said that gross domestic product grew 0.3 percent in the October-December period compared with 0.7 percent in the previous quarter.
The figure was lower in part because of an apparent reluctance by German consumers to spend, a factor that can hold growth back as the makers of everything from washing machines to automobiles scale face less domestic demand.
On the year, German GDP rose 1.6 percent over the fourth quarter of 2006, or 1.8 percent when adjusted for the number of working days in each quarter.
The figures were in line with the government's preliminary figures that it published earlier this month and were the same as the estimates that economists polled by Dow Jones Newswires had predicted.
The provisional growth rate for 2007 GDP was not changed from the figure released last month _ 2.5 percent, or 2.6 percent when adjusted for calendar differences.
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On the Net:
http://www.ifo.de


Updated : 2021-04-14 21:56 GMT+08:00