Unexpected boost to business confidence in Germany as economic growth bucks trend
GERMAN business confidence rose unexpectedly this month, for the first time in five months. The news came as it was confirmed that the German economy expanded by 0.5pc in the third quarter of this year, driven almost entirely by domestic demand.
Munich-based Ifo's business climate index shows business confidence increased to 106.6 this month from 106.4 in October in Germany. The survey result bears out research from Germany's Federal Statistics Office that shows the German economy expanded at a faster rate in the past three months than it grew over the summer.
The influential Ifo index is based on a survey of 7,000 executives and fits with recent data that has shown German consumer sentiment has held up despite the wider eurozone woes.
Its latest findings run against the grain of data from elsewhere that shows slowing economic growth and comes despite the unsettling effects of the debt crisis on business and consumer demand.
Earlier this week the president of Germany's BDI industry federation, said that a recession was unlikely as industrial companies were in "robust condition" with "well-filled" order books.
In Germany, unemployment is close to a 20-year low and strong domestic demand is helping insulate German business from the down turn elsewhere.
Germany is feeling some effects from the crisis, however. Growth is expected to slow to 0.8pc in 2012 from 2.9pc this year, according to the European Commission.