Apr MNI analysts survey Mar Feb
median range
————————————————————————
Business sentiment: 109.9 109.5 108.5 – 110.1 109.8 109.7
Current conditions 117.5 117.0 116.0 – 117.6 117.4 117.4
Six-month outlook: 102.7 102.3 101.0 – 103.0 102.7 102.4
—

FRANKFURT (MNI) – Business sentiment in Germany improved slightly
in April, reflecting a brighter assessment of the current situation
brightened, the Ifo institute reported on Friday.

After five months of increase, Ifo’s business climate indicator
surprised to the upside again, rising 0.1 point to 109.9, its highest
level since July. Most analysts had expected a modest decline.

“The German economy is proving resilient,” Ifo President
Hans-Werner Sinn said in a press release.

After stalling in March at 117.4, the current conditions component
also gained 0.1 point to a six-month high of 117.5, surpassing most
analysts’ forecasts.

The expectations component was unchanged at 102.7 following five
consecutive months of increase. Most analysts had expected a small
erosion.

The further improvement in Ifo’s sentiment index after the
unexpectedly optimistic assessment of analysts canvassed last week by
Germany’s ZEW think tank is reassuring in light of the ongoing slowdown
in industry orders and the slide in the PMI polls.

March’s composite PMI (51.6) slipped to its lowest level in three
month on the back of contracting factory output and slowing growth in
services. Falling industry orders (46.3) and the squeeze on profit
margins from rising input costs point to further weakness ahead.

ZEW President Wolfgang Franz also noted that Germany faces
“considerable risks such as the economic slowdown of important trading
partners, the rise of prices for crude materials and the sovereign debt
crisis in the Eurozone.”

Germany’s leading economic institutes, including Ifo, see the
economy regaining strength this spring following a lull in 1Q on the
back of a strong labour market and low interest rates.

“As in previous years, the main impulses will come from domestic
demand, and especially from investment and private consumer
expenditure,” the institutes said, projecting GDP growth of 0.9% this
year and 2.0% next year.

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

[TOPICS: M$G$$$,MT$$$$,M$X$$$,M$XDS$,MAGDS$,MTABLE]