ifo Business Climate Index continues to set records

The mood among German businesses once again improved upon the record level seen in the previous month. The ifo Business Climate Index reached a new all-time peak of 117.5 points (October: 116.8 points). The current increase can be attributed to improved business expectations alone, with companies looking with inflated optimism to the near future. While the assessment of the current business landscape may certainly have deteriorated slightly, it still remains at an exceptionally high level.

The new sentiment peak can be seen as connected to export-oriented sectors. The manufacturing industry also reached a record high, while the mood among wholesalers has never been more buoyant than in December 2010. The business climate for retailers and construction companies which primarily operate domestically has, by contrast, worsened slightly. The mood level is, however, still very high in these sectors in a long-term comparison.

On account of rising exports, increased capital expenditure on equipment and a persistently strong level of domestic demand, the economic upswing is broadly based. The vast majority of businesses can benefit from this development. As the positive framework conditions are set to remain in place for the time being, the upward trend is likely to continue. The German economy is running at full steam – and the difficulties in forming a government do not appear to be affecting the economic trend at all!

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