German Business Optimism Climbs to Record High As Economy Booms
German companies are more confident than ever as they tap into the global economic upswing.
A measure of the nation’s business confidence set a new record high in November. The Ifo institute’s index climbed to 117.5 from a revised 116.8, beating economists’ estimates for the gauge to remain unchanged.
Germany’s economy, the largest in Europe, has soared this year as global trade picks up and the euro area’s revival becomes more broad-based . The Bundesbank predicts that German momentum will carry into the final quarter, and economists foresee the fastest expansion since 2011.
Ifo’s gauge of expectations rose to 111.0 from a revised 109.2, though a measure of current economic conditions dropped to 124.4 from 124.8.
One headwind is domestic political uncertainty after Chancellor Angela Merkel saw her efforts to form a coalition government collapse. Ifo said 90 percent of the responses to its survey were submitted before that turn of events.
In the wider euro area, economic growth is powering ahead, with the European Central Bank claiming credit for the most synchronized upswing since the single currency was founded almost two decades ago. A purchasing managers index measuring private-sector activity accelerated in November after new orders surged the most in more than 6-1/2 years, and companies added jobs at one of the fastest rates in at least two decades.
While the ECB has claimed credit for driving growth with its extraordinary monetary stimulus, policy makers are considering plans for gradually withdrawing some of their support.