IFO: German Business Sentiment Rises in March

A survey showed today, Friday, that German business confidence reached its highest level in nearly two years in March, as increased demand for manufactured goods kept factories in Europe’s largest economy in a state of activity during the rise in infections with the Coronavirus and restrictions of general isolation.

The IFO Institute said its business climate index rose to 96.6, the highest reading since June 2019, from an upwardly revised 92.7 in February. A Reuters poll had indicated a reading of 93.2 in March.

The positive survey adds to indications that the economy is overcoming the pandemic without disruption relatively in an election year that was marked by growing dissatisfaction with German Chancellor Angela Merkel’s administration of the general isolation measures and the slowdown in the virus vaccination campaign.

IFO said that the high demand for German goods indicated a recovery in the industrial sector, where optimism hit its highest level since November 2010.

The survey also concluded that the services sector, which has been hit hard during the lockdown measures in place since November, is also showing initial signs of recovery.