German businesses at bullish best

frankfurt — It seems the sky is the limit for Germany’s economy. Business confidence — logging its fifth consecutive increase — jumped to the highest since 1991 this month, underpinning optimism by the Bundesbank that the upswing in Europe’s largest economy is set to continue. With domestic demand supported by a buoyant labour market, risks to growth stem almost exclusively from global forces.

“Sentiment among German businesses is jubilant,” Ifo president Clemens Fuest said in a statement. “Germany’s economy is performing very strongly.”

Growth was the fastest in a year in the three months through March, bolstered by an unexpected pick-up in manufacturing, which bodes well for investment. Earlier this month, Germany’s central bank raised its economic outlook through 2019, arguing that increasing employment, consumer spending and construction would ensure an “ongoing solid underlying pace” of expansion.

as the domestic economy is gaining even more momentum, the biggest risks for the German economy still come from abroad Carsten Brzeski, chief German economist at ING-Diba

“The industrial revival could be the surprise story of the year in the German economy,” said Carsten Brzeski, chief German economist at ING-Diba in Frankfurt. “As the domestic economy is gaining even more momentum, the biggest risks for the German economy still come from abroad.”

So far, managers have ignored the specter of protectionist policies from the US, as well as threats of weaker growth in the UK in response to Brexit talks.

The Munich-based Ifo institute’s business climate index rose to 115.1 in June from 114.6 in May. That’s the highest since data for reunified Germany are available and compares with a median estimate for a dip to 114.5 in a Bloomberg survey of economists. — Bloomberg