- Carsten Brzeski, economist at ING
Business morale among German top executives improved in December, reinforcing the view that Europe's number one economy is on course to pick up in the final quarter of the year after narrowly avoiding a recession in the three months through September. The German Ifo Business Climate Index, which is based on a survey of manufacturers, builders, wholesalers and retailers, rose to 105.5 in the reported month, compared with an expected 105.5 reading. Meanwhile, the Current Assessment sub-survey, assessing current conditions in the Euro area's biggest economy, booked 110 points, same as the previous month's figure of 110 and below estimates of 110.4 points. Moreover, the Ifo Expectations Index, indicating firms' projections for the next six months, came in at 101.1, up from 99.8 in November.
The recently released Ifo survey echoes the signs of renewed sanguine mood seen in the recent ZEW index, which measures investor sentiment in Germany. According to the ZEW index released earlier this week, German investor optimism improved further in December, hitting the highest level since May 2014. On top of that, preliminary PMI data for the manufacturing and services sectors came in mixed, with the German manufacturing sector returning to expansion, while the services sector showed a deteriorating trend in December.
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