German business expectations rebounds in November to new all-time high

Business expectations in Germany rebounded in November in spite of the political deadlock. The Ifo business climate reached a new all-time high in November, driven by brighter expectations. The index rose to 117.5 from 116.8, coming in above consensus expectations of 116.6. The upswing in Germany is solid and widespread. Markedly, capex spending now appears to be on a sustained upward path as well, rising 5.9 percent in the third quarter.

In the meantime, things are moving on the political front. After intense pressure both from within the party and from outside, the Social Democratic SPD has revised its decision to not even talk regarding a possible involvement in the next government.

The German economy is on the path for a boom, noted ifo Institute. The latest figures indicate economic growth of 0.7 percent in the fourth quarter, pointing to growth of 2.3 percent for 2017 as a whole.

The index in manufacturing also reached a new record, owing to more optimistic expectations. Manufacturers scaled back their assessments slightly on their current business situation, which however continues to be at a high level. A growing number of manufacturers plan to raise prices.

Within wholesaling the business climate index rose noticeably and is now just slightly below its historical record high. The business climate index in wholesaling rose notably and is not just below its historical record high. Wholesalers were significantly more satisfied with their current business situation. They also anticipate their business to rebound further in the next six months. On the contrary, business climate deteriorated in retailing. Retailers’ assessments of their current business situation were far poorer; however, they expressed greater optimism about the next six months.

Within construction, the business climate index dropped. Contractors scaled back assessments of both their current business situation and their expectations, which however continue to remain at a high level.

In construction the business climate index fell. Contractors slightly scaled back assessments of both their current business situation and their expectations, which nevertheless remain at a high level.

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