Germany economic sentiment rises sharply in January – survey

18 January 2011 14:16  [Source: ICIS news]

TORONTO (ICIS)--A key German economic expectations indicator rose sharply in January as financial market analysts expect Europe’s largest economy to continue to grow, a research institute said on Tuesday.

The Mannheim-based ZEW Centre for European Economic Research said its monthly economic expectations indicator rose to 15.4 points in January, up 11.1 points from 4.3 points in December - marking its third consecutive increase.

The increase in the indicator, which was based on a poll of 284 analysts between 3 January and 17 January, showed that investments were gaining momentum in Germany as well as abroad, ZEW said.

"The currently low level of real interest rates should strengthen demand for capital equipment in Germany,” said ZEW president Wolfgang Franz. At the same time, increased job security would boost German private consumption, he added.

ZEW also pointed to improved German industrial orders, which rose 5.2% in November 2010 from October. On a two-month year-on-year comparison, orders were up 19.3% in October-November 2010 compared with the same period in 2009.

In addition, “surprisingly positive data” from the US economy released at the end of 2010 had raised hopes that robust worldwide economic growth would continue, the institute added.

Meanwhile, in Germany's chemical industry, an employers trade group said last week that production was still 2% below pre-crisis levels and chemical firms’ investment plans continued to be marked by uncertainty over the future economic situation.

Germany's chemical production is expected to grow by 2.5% in 2011. This would compare with 11% growth in 2010, after a 10% decline in 2009 from 2008.

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By: Stefan Baumgarten
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