German business confidence highest in six years
German business morale brightened more than expected in April, hitting its highest in nearly six years, suggesting Europe's largest economy is set to carry its robust upswing into the second quarter of this year.
The Munich-based Ifo economic institute said its business climate index - based on a monthly survey of some 7,000 firms - rose to 112.9 from an upwardly revised 112.4 in March.
Meanwhile, UK factories saw their strongest export orders in six years in early 2017, helped by sterling's fall after the Brexit vote, but business is scaling back on investment plans, a survey showed yesterday.
The Confederation of British Industry's quarterly measure of manufacturing showed how last year's referendum decision to leave the European Union has helped and hindered companies.
"The German economy is growing strongly," Ifo chief Clemens Fuest said in a statement.
Ifo economist Klaus Wohlrabe told Reuters that the German economy was not being influenced by political uncertainties such as the threat of rising protectionism, major elections in Europe and the course of Brexit negotiations.
The survey was conducted in the first half of April, meaning it did not include any reaction to the first round of the French presidential election on Sunday in which centrist Emmanuel Macron came in first, qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.
Managers' assessments of the business situation improved significantly while their outlook for the coming six months was a bit less optimistic, it showed.
Morale improved in construction, retailing and wholesaling whereas managers in manufacturing were somewhat less upbeat.
In construction, assessments of the business situation rose to a new record high while expectations remained broadly positive and the order level was excellent, Ifo said.
"The Ifo index continued its recent surge in April, increasing for the third consecutive month, suggesting that Germany's golden cycle has entered yet another round," ING economist Carsten Brzeski said.
"The only weak spot of the German economy remains rather sluggish investment," he noted, adding the government should focus on the import side of the trade surplus and further support domestic demand, preferably in the form of stimulating higher private and further increasing public investments. (Reuters)