Jan MNI analysts survey Dec Nov
median range
————————————————————————
Business sentiment: 108.3 107.6 106.2 – 108.4 107.3 106.7
Current conditions 116.3 116.8 98.0 – 117.7 116.7 116.7
Six-month outlook: 100.9 99.3 98.0 – 115.0 98.6 97.6
—

FRANKFURT (MNI) – Optimism among German businesses grew for the
third consecutive month in January, overshooting most forecasts to
reach a five-month high, as brightening near-term prospects offset a
modest decline in the current situation, the Ifo institute reported on
Wednesday.

Further improvement in January lifted the business climate
indicator to 108.3, beating all but the most optimistic forecasts. A
majority of analysts had projected only a modest rise in sentiment this
month.

“The German economy has started the year positively,” Ifo President
Hans-Werner Sinn said in a press release.

After stabilizing in December, the current conditions component
slipped 0.4 point to 116.3, its lowest point since October 2010.
Conversely, expectations continued trending upwards, reaching 100.9, a
six-month high.

While German economic activity likely lost some ground over the
last three months of 2011, the five-month high in the January
manufacturing PMI (50.9) and the seven-month high in services (54.5)
suggest that the Eurozone’s largest economy started 2012 on better
footing.

Still, any sustained forward momentum may well be limited. The PMI
survey pointed to ongoing declines in new business, with manufacturing
export orders falling for the seventh consecutive month.

Although morale among investors hit a six-month high in January,
the ZEW’s barometer also suggests that Germany may not be entirely out
of the woods yet. A majority of respondents still expect things to
worsen over the next six months, leaving the headline figure more than
45 points below its historical average.

The Bundesbank does not foresee a pick-up in growth in the first
quarter of this year, the central bank said in its monthly bulletin on
Monday. Bundesbank President Jens Weidmann said he expected the economic
upswing to resume over the course of the year, provided there is no
aggravation of the Eurozone debt crisis. The central bank has forecast
full-year GDP growth of 0.6%.

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

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