German firms still reporting better growth

BUSINESS confidence in Germany has improved again this month, with strong perceptions of the current market and higher expectations for the months ahead.

The headline score of Ifo’s major index rose to 110.6, up from 109.5 in December. Any score over 100 indicates positive market sentiment.

The part of the index which measures expectations also improved, up to 108.9 from 107.4 in the previous month.

“Concerns about emerging markets do matter for the highly open German economy. But we have to put these into perspective. German exports to South America, Africa and Turkey add up to 5.5 per cent of German exports, slightly less than the 5.6 per cent for China. If China stays stable, as we believe it will, that will help to cushion Germany nicely against some losses,” said Berenberg’s Holger Schmieding.

The country’s constitutional court is also noted as a potential tailwind, as it deliberates on whether the European Central Bank’s unconventional monetary policies are legitimate in German law.