German business confidence jumps on export prospects – survey

23 July 2010 17:33  [Source: ICIS news]

TORONTO (ICIS news)--German business confidence marked its largest monthly increase in July since the country’s reunification in 1990, largely driven by improved export prospects, a research institute said on Friday.

Munich-based Ifo institute said its monthly business climate index rose to 106.2 points in July, up by 5.6 points from June. The index is based on a survey of 7,000 businesses across Europe’s largest economy.

Ifo president Hans-Werner Sinn said the latest survey showed that producers were optimistic about export prospects. Also, industry capacity utilisation was increasing, he said.

Manufacturers were especially upbeat, with many indicating they may boost staff levels, the survey found.

Germany’s government noted the July survey results in a press release.

The increase in the Ifo index contrasts with July’s decline in another key indicator that measures economic sentiment based on a survey of analysts. Mannheim-based ZEW centre for European economic research said earlier its economic sentiment index marked its third monthly decline in a row in July amid continued worries over the euro zone debt crisis.

As for Germany’s chemical industry, chemical production rose 13% in the first half of 2010, compared with the first half of 2009.

However, Frankfurt-based chemical trade group VCI has said it expected production to grow at a slower pace in the second half of 2010, partly due to lower growth in the EU, which is the largest export market for Germany’s chemical producers.

Full-year 2010 chemical production growth is forecast at 8.5%, after a 10% decline in 2009 from 2008.

Meanwhile, Germany’s central bank, the Bundesbank, recently raised its 2010 GDP growth forecast for Germany to 1.9%, from its earlier projection of 1.6%. The growth would come after a 4.9% decline in 2009 from 2008.

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By: Stefan Baumgarten
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