Ger­man con­fi­dence up but low com­ing: an­a­lysts

The Myanmar Times - - International Business -

GER­MAN busi­ness con­fi­dence has hit a two-year high, the Ifo eco­nomic in­sti­tute said, sug­gest­ing the coun­try had shaken off post-Brexit blues, but an­a­lysts warned of a pos­si­ble slow­down ahead.

The Mu­nich in­sti­tute’s head­line busi­ness con­fi­dence in­dex hit 110.5 points in Oc­to­ber, up one point from Septem­ber’s 109.5, and the high­est level since April 2014.

A plunge in the in­dex over July and Au­gust was blamed on Bri­tain’s June 23 vote to quit the EU, but a spring had re­turned to Ger­man busi­nesses’ step by Septem­ber.

“The up­turn in the Ger­man econ­omy is gath­er­ing im­pe­tus,” Ifo pres­i­dent Cle­mens Fuest said.

Septem­ber’s sur­prise con­fi­dence re­bound had prompted Mr Fuest to pre­dict a “golden au­tumn” for Europe’s largest econ­omy.

In the event, busi­ness peo­ple’s mood in Oc­to­ber beat the fore­casts of an­a­lysts sur­veyed by Fac­tset, who had pre­dicted the in­di­ca­tor would re­main flat.

Sub-in­dexes mea­sur­ing busi­nesses’ opin­ion of the cur­rent eco­nomic sit­u­a­tion and the out­look for the com­ing six months both rose.

Ex­pec­ta­tions saw an es­pe­cially strong surge, reach­ing 106.1 points – an in­crease of 1.6 points on Septem­ber’s fig­ure.

Both the man­u­fac­tur­ing and con­struc­tion sec­tors were con­fi­dent about the fu­ture, with build­ing firms’ ex­pec­ta­tions hit­ting a new record high.

Re­tail­ers’ mood was largely un­changed from Septem­ber, while whole­salers’ view of both the cur­rent cli­mate and the com­ing months dark­ened slightly.

The data comes on top of strong read­ings in the pur­chas­ing man­agers’ in­dex (PMI) – a sur­vey of ac­tiv­ity in pri­vate com­pa­nies – in Ger­many and the whole eu­ro­zone.

Oc­to­ber’s PMI and com­fort­ing in­dus­trial pro­duc­tion data for Au­gust “sug­gest that the Ger­man econ­omy con­tin­ued to per­form well in the se­cond half of 2016,” Jen­nifer McKe­own of Cap­i­tal Eco­nom­ics said.

But she pointed to a likely slight slow­ing of growth in Europe’s eco­nomic pow­er­house in 2017, as in­fla­tion be­gins to weigh on con­sumer spend­ing. –

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