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Friday 28th of January 2011
August 26, 2009    

Survey shows rise in German business confidence in August

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by Kay Murchie
Survey shows rise in German business confidence in August

The Ifo think tank has today announced that confidence among German firms has grown for the fifth consecutive month and has risen to its highest level since September 2008.

The business climate index from the Ifo Institute increased to 90.5 in August from a revised 87.4 the previous month.

The rise in morale comes just a week after it emerged that Europe’s largest economy has emerged from recession.

The news sent the euro briefly up to 87.82 pence - up 0.43% on the day.

The news could also be good for Chancellor Angela Merkel ahead of a federal election next month.

Commenting on today’s figures, Stefan Schilbe, analyst at HSBC Trinkaus, said: “These are extremely positive numbers that go well beyond our expectations.”

“After the positive [economic] growth rate in the second quarter, the upturn will most likely firm up. We’re expecting robust growth rates in the second half of the year,” he added.

However, unemployment in the country is expected to rise considerably, according to Alexander Koch, economist at UniCredit, despite a fall in unemployment for the first time in nine months in July.

At the end of July, the unemployment rate in Germany stood at 8.3% with almost 3.5 million in the country without jobs.

The Organisation for Economic Cooperation and Development recently predicted that unemployment could reach as high as 11% in 2011.

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