BERLIN — German business confidence unexpectedly rose to its highest level in more than three years in September as a stronger economy supported business, but the coming months are likely to be more difficult, a closely watched survey showed Friday.
The Ifo institute’s confidence index, a key indicator for Europe’s biggest economy, edged up to 106.8 points this month from 106.7 in August.
September’s rise was the fourth in a row and takes the index to its highest level since June 2007.
The rise was also unexpected - the consensus in the markets was for a modest decline.
“Firms are again more satisfied with their business situation,” Ifo said. “For the near future they continue to be optimistic, although not quite as much as in August. The business high continues.”
The main impetus behind the September rise in confidence was the wider economy - in the April-June quarter, the German economy grew by a quarterly rate of 2.2 percent. That was thanks in particular to booming exports.
The pace of growth is expected to moderate, though, amid signs that the global recovery from recession is faltering.
“Of course, second-quarter growth was unique and exceptional and a slowdown is inevitable,” said Carsten Brzeski, an economist at ING in Brussels.
Business, Pages 80 on 09/26/2010