Sponsored Links
German business confidence strengthened more than expected in December to a 17-month high, bringing Christmas cheer to the economy that has emerged from its worst recession, a closely watched survey showed Friday.
Business sentiment improved further to 94.7 in December, according to a survey conducted by Munich-based Ifo Institute for Economic Research. The index stood above prior month's 93.9 and the expected 94.5.
Although, sentiment improved far more modestly than during the summer, the index points to a further sharp slowdown in the annual rate of economic contraction, said Jennifer McKeown, senior European economist at Capital Economics. She also said the economy continues to recover, but the rate of improvement will be fairly gradual.
The index measuring current assessment stood at 90.5 in December, up from 89.1 in the previous month and consensus forecast of 90. The survey is based on 7,000 monthly responses of firms in manufacturing, construction, wholesaling and retailing.
Meanwhile, business expectations rose to 99.1 from 98.9. Economists were looking for a reading of 99. The optimistic and the skeptical outlook assessments nearly balance out, the institute said.
Business expectations will most probably stagnate in the coming months and then drop a little, said Jörg Krämer, Commerzbank chief economist. Following a very strong second half year in 2009, growth will gradually normalize and slow down after the turn of the year, he noted.
Manufacturers are less dissatisfied with their current business situation. Despite this improvement, business situation remained worst than after the attacks of September 11. The survey found that business expectations amongst manufacturers for the coming six months are somewhat more reserved. At the same time, exporters would take a more positive development in the months ahead.
Business sentiment showed a positive trend in wholesaling and retailing and construction. Retailers are more dissatisfied with their current business situation in December, but they are clearly less sceptical regarding the business outlook. In wholesaling, present situation are more favorable and the business expectations remained dampened.
"The improvement in retail is very comforting as we are now looking for private consumption to kick in as a more sustainable driver of growth," Danske Bank senior economist Frank Øland Hansen said. "A stabilised labour market and the additional tax cuts announced are good reasons for the German retail sector to anticipate a merry Christmas."
The construction firms are less dissatisfied with their current business situation than in the past month. They assessed the business outlook for the coming half year with similar restraint as before.
Confidence in the service sector also rose clearly in December to 5.5, reaching a new high for the year. Service providers in Germany assessed that their current business situation strengthened more favorably to a positive reading of 2. Appraisal of the six-month outlook moved up to 9 from 8 in November.
According to an ING economist Carsten Brzeski, today's good Ifo reading completes a positive end to a horrible year. The stimulus package like infrastructure projects still will have to unfold their full impact next year. As the global recovery gathers speed, exports will continue to act as the growth driver. While, these are not enough to undo the crisis immediately, low capacity utilization and increasing unemployment will remain a painful reminder of the severity of the crisis.
0 komentar:
Post a Comment