German business morale rises unexpectedly in Sept

BERLIN: German business morale rose unexpectedly for the third month in a row in September, a leading survey showed on Thursday, suggesting company executives in Europe’s largest economy remain upbeat despite concerns of an economic slowdown in China.

The Munich-based Ifo institute said that the vast majority of survey responses had come before the Volkswagen emissions scandal erupted last Friday and that any economic impact from that would likely appear in next month’s report.

Analysts have warned that the Volkswagen crisis over rigged emissions tests could develop into the biggest downside risk for Germany’s exportoriented economy.

“We had expected that the export expectations of industry would have perhaps fallen a bit,” Ifo economist Klaus Wohlrabe said, pointing to China. ‘‘They did not, they actually rose slightly.”

Ifo’s business climate index which is based on a monthly survey of some 7,000 firms rose to 108.5 in September from an upwardly revised 108.4 in August.

That was the strongest reading since May and compared with the Reuters consensus forecast for a drop to 108.0.

“The German economy looks in very robust shape,” Wohlrabe said, noting that an influx of refugees had a positive impact on the retail sector. KfW Chief Economist Joerg Zeuner said German companies had shrugged off the recent turmoil on the financial markets and the concerns about weaker demand from emerging markets.