Feb MNI analysts survey Jan Dec Nov
median range
———————————————————————
Business sentiment: 109.6 108.8 107.9-109.9 108.3 107.3 106.7
Current conditions 117.5 116.3 115.0-117.3 116.3 116.7 116.7
Six-month outlook: 102.3 102.0 100.9-103.4 100.9 98.6 97.6
—

BERLIN (MNI) – Optimism of German businesses grew for the fourth
consecutive month in February, beating most forecasts to reach a
seven-month high of 109.6, the Ifo institute reported on Thursday.

After falling in January, the current conditions component
rose 1.2 points to 117.5, reaching a five-month high. Expectations
improved for a fourth month in a row, climbing 1.4 points to a
seven-month high of 102.3.

“The German economy is currently supported by domestic demand,”
said Ifo president Hans-Werner Sinn.

Earlier this month, a survey conducted by the German Chamber of
Industry and Trade (DIHK) from mid-December to end-January amongst more
than 28,000 companies also showed that business sentiment remained
upbeat.

The balance of sentiment on current conditions (those firms judging
conditions as good minus those judging them as poor) remained at +37 —
significantly above the long-term average of +5.

However, expectations for the next 12 months remained more subdued.
They fell from +7 to +5 — only slightly above the long-term average of
+3. “In sum, firms are cautiously optimistic regarding 2012,” DIHK said.
Based on the survey results, the association left its GDP growth
forecast for this year unchanged at 1.0%.

The economic panel of the German Banking Association (BDB),
consisting of the chief economists of the main private banks in Germany,
on Wednesday forecast that German GDP would grow 0.5% this year and 1.5%
next year.

The economists expect economic activity to remain muted in the
first quarter and to start gradually picking up by the second. “The main
growth pillar will be domestic demand,” said BDB board member
Hans-Joachim Massenberg.

The Bundesbank also predicted in its latest monthly report that the
economy is set to return to its growth path in the spring. “The outlook
for the German economy recently improved perceptibly, though risks
relating to the sovereign debt crisis remain,” the central bank said.

In the first quarter, negative external factors will continue to
weigh on production, the Bundesbank reasoned. “From the second quarter
onwards, cyclical upswing forces could gain the upper hand again.”

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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