German biz confidence at record high

Business confidence in Germany rose to yet another record high in July, a fresh index by the Munich-based Ifo economic research institute showed Tuesday.

The latest barometer climbed to 116 points, up from a reading of 115.2 points for June, the think tank said. Like every month, it had surveyed some 7,000 companies for its index, asking executives about their assessment of the current situation and their expectations for the next six months.

The survey indicated that managers were euphoric, in fact they'd never been more upbeat about the domestic economy since German reunification in 1990.

Trouble brewing?

Germany's economy, the largest in the 19-member eurozone, has been growing steadily thanks to booming exports and strong domestic demand amid low unemployment at home.

"The German economy is powering ahead," Ifo President Clemens Fuest said in a statement Tuesday.

"What's important is that the economic upswing perceived by executives across the nation is now also translating into a pickup in industrial production, with Germany profiting also from the healthier economies in fellow European nations," KfW Chief Economist Jörg Zeuner commented.

Economist Thomas Gitzel from VP Bank agreed in principle, saying that "managers are currently in an excellent mood that's not even spoiled by a somewhat stronger euro."

But he warned that the situation might change drastically in the wake of the current investigations by antitrust authorities who suspected Germany's big carmakers of having colluded on diesel emissions in a secret cartel.

hg/uhe (AP, AFP)