The ifo business climate exceeded expectations in March, growing for the fifth month in a row, from 106.8 to 107.9 bsp as German economic recovery gained pace.
The assessment of the current economic situation improved from 111.3 to 112.0 bsp while the outlook grew from 102.5 to 103.9 bsp. Seen by industry, almost all sectors of the German economy showed strong signs of growth, with manufacturing growing from 9.5 to 12.5bsp and retail growing by 3.3 to 5.2bsp. One notable exception is the construction industry, where the index declined from -5.8 to -7.8bsp.
“The Ifo index suggests that while consumption may be the most robust driver of German growth at the moment, investment and exports should kick in as the year progresses as well. Germany’s strength is good news for the rest of the Eurozone, although the firming recovery in countries like Spain and even Italy means they may be less dependent on German demand than during the depths of the crisis in 2011/12” comments Christian Schulz, senior economist at Berenberg.