German Business Mood Brightens In April

Talking about economies making it out of the squeeze, German business confidence ticked up slightly in April, a key survey showed Monday, even as the third wave of the pandemic continued its assault on Europe’s top economy.

The Ifo institute’s monthly confidence barometer, based on a survey of 9,000 companies, climbed 0.2 points from March to 96.8 points.

“Companies once again raised their assessments of the current business situation,” Ifo president Clemens Fuest said in a statement.

“However, they were no longer quite so optimistic about the coming six months,” he said, with relentlessly high levels of new Covid-19 infections and bottlenecks in supply chains undermining Germany’s economic recovery.

The survey reflected a mixed picture. While manufacturers reported their strongest sentiment in since May 2018, the climate in the service sector fell slightly following a steep rise in the previous month.

“The German economy clearly has many, very different, faces right now,” said Carsten Brzeski of ING Economics.

Nevertheless, he said, “looking beyond possible short-term data distortions, the general outlook for the German economy has clearly improved”.

Germany, the EU’s most populous country, has recorded nearly 3.3 million Covid-19 cases since the start of the pandemic, and more than 81,000 deaths.

Parliament last week passed a “emergency brake” law imposing tough coronavirus restrictions across the country including night curfews and school closures to try to get the outbreak under control.

Gross domestic product (GDP) shrank by five percent in 2020, its worst contraction since the financial crisis of 2009, due to economic fallout from the pandemic.

However, the government is set to lift its forecast of a three-percent rebound this year as industry shows resilience, Economy Minister Peter Altmaier said in an interview with the Funke media group published Saturday.