German business confidence strengthened to its highest level in more than two years in June as the easing of restrictions related to the coronavirus pandemic lifted expectations and managers’ current assessment, survey results from ifo Institute on Thursday.
The business climate index rose to 101.8 in June from 99.2 in the previous month. The score was the highest since November 2018 and also exceeded the expected level of 100.6.
Companies assessed their current business situation as much better and optimism regarding the second half of the year also grew.
The German economy is shaking off the coronavirus crisis, Clemens Fuest, ifo President, said.
The current conditions index came in at 99.6 in June. Economists had forecast the index to advance to 97.8 from May’s 95.7.
Likewise, the expectations index climbed to 104.0 in June from 102.9 in the previous month. This was marginally above the expected score of 103.9.
In manufacturing, business confidence rose to its highest value since April 2018. Companies were notably more satisfied with their current business and their expectations were somewhat less optimistic.
However, many companies were concerned about increasing bottlenecks in intermediate products.
In the service sector, business sentiment jumped higher. The indicators for the current situation and for expectations both rose appreciably in June.
In trade, the easing of restrictions improved the business climate greatly and confidence in construction rose a little in June.
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