Monday, May 25, 2009

German Business Confidence at All Time Low... "Optimism" Abounds

Another 'When "It Can't Possible Get Worse than This" is a Good Thing'.

The AFP reports:

German business confidence rose to a six-month high in May, a key sentiment index showed on Monday, suggesting that Europe's top economy might be pulling out of its worst slump in over 60 years. The closely watched Ifo indicator rose for a second consecutive month to 84.2 points from 83.7 points in April, adding to evidence that sentiment is again on the up in Germany, the world's biggest exporter.

The result was slightly worse than expected, however. Analysts surveyed by Dow Jones Newswires had expected the index to rise to 85 points. Economists see the index as a key leading indicator to gauge the future health of the economy. It had been falling steadily -- with occasional blips -- since June 2008 as sentiment firms plummeted due to the global financial crisis.

Tempering the optimism, however, was a sub-index showing that companies' view of the current situation in Germany dropped in May to 82.5 points, its lowest level ever. Rees said this sub-index showed that the German economy was unlikely to recover from the slump as quickly as it plunged into it.

Business Balances

Source: Ifo Institute

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