German business confidence unexpectedly rose from the lowest in 2 1/2 years in November, signaling Europe’s largest economy may regain some strength.
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October, the first gain in eight months. Economists predicted a drop to 99.5, according to the median of 48 forecasts. French business confidence increased from the lowest in more than three years this month, a separate report showed today.
German growth slowed less than economists forecast in the third quarter even as the euro area, the country’s largest trading partner, slipped into recession and the outlook for the global economy dimmed. While German manufacturing shrank in November, adding to signs of an economic contraction in the fourth quarter, the slowdown may prove to be temporary.
Ifo’s measure of executives’ expectations rose to 95.2 from 93.2 in October, while a gauge of the current situation rose to 108.1 from a revised 107.2.
German growth slowed to 0.2% in the third quarter from 0.3% in the second, the Federal Statistics Office confirmed today. Exports, household spending and construction were the main contributors to growth, while inventories and company investment in plant and machinery subtracted from it.
German consumer confidence will rise to a five-year high this month, according to market research company GfK, as rising wages and unemployment near a two-decade low outweigh economic concerns. The economy will expand 0.8% this year and next, the European Commission forecasts. By contrast, it predicts a 0.4% contraction in the euro area this year and growth of just 0.1% in 2013.
