June MNI analysts survey May April
median range
———————————————————————
Business sentiment: 114.5 113.7 113.0-114.0 114.2 114.2
Current conditions 123.3 121.0 120.4-121.5 121.5 121.0
Six-month outlook: 106.3 106.9 105.0-107.1 107.4 107.7
—

FRANKFURT (MNI) – Business morale in Germany recovered in June for
the first time since February, as companies’ assessment of current
conditions brightened even though their outlook continued to erode, the
Ifo institute said Friday.

After falling 1.2 points from February’s record high, the overall
sentiment indicator regained 0.3 point to 114.5 beating all forecasts of
analysts, who had expected a further decline.

The euro rose against the dollar to $1.4232 following results of
the IFO survey.

The current conditions rose to 123.3 from 121.5 in May, while
expectations dropped to 106.3 from 107.4

While improvement in current business conditions is welcome, most
observers continue to expect a deterioration in the months ahead. On
Tuesday, the ZEW index of analysts’ outlook for the economy fell more
than expected to a 29-month low. A majority of respondents expected
conditions to deteriorate over the next six months.

The factory PMI fell to a 17-month low in June (54.9), as output
growth slowed to weakest pace since September and orders rose at slowest
pace in nearly two years. Manufacturers’ near-term output expectations
eroded for the third month in a row in May to a nine-month low,
according to the European Commission’s survey.

The Bundesbank expects growth to be “much more muted” in 2Q. “Given
that overall capacity utilisation has returned to normal, the still
relatively high underlying pace of economic growth is likely to ease
gradually,” it predicted last week.

The central bank sees GDP growing 2.6% this year after +3.8% last
year: “On an annual average, this would – given a considerable
carry-over effect from the previous year – equate to an increase in
real economic output of 3.1% in calendar-adjusted terms, after 3.5% the
previous year.”

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— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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