German corporate confidence rejuvenates after six months of decline

Berlin — Corporate confidence in Germany, Europe’s largest economy, has recovered unexpectedly after a six-month slide.

According to the Ifo Institute for Economic Research, monthly confidence rose from 94.8 in December to 95.7 points in January. Economists predicted that it would fall further slightly to 94.5.

The index has risen due to significant improvements in forecasts over the next six months. Administrators’ assessment of the current situation, another factor in the investigation, has deteriorated slightly.

Ifo said the supply bottleneck has been slightly eased and the confidence of manufacturing managers has increased significantly. Service managers are also more optimistic, saying “the tourism industry is looking forward to a promising summer,” but for now, hospitality is “at risk.”

In Germany, new coronavirus infections have surged as highly contagious variants of Omicron have become established, but so far there has been no significant increase in hospitalizations.

Prime Minister Olaf Scholz and 16 German Governor decided on Monday to keep the existing coronavirus restrictions, but will not impose new restrictions for the time being. The Minister of Health said the number of cases is expected to peak in mid-February.

The German National Bureau of Statistics estimates that German production fell by 1% from 0.5% in the last quarter of last year. Forecasts for the first three months of the year are also volatile, raising the possibility of a technological recession.

Ifo’s survey is based on responses from approximately 9,000 companies in various business units.

Associated Press