German business sentiment surged to its highest level in 16 months in August, driven by a pickup in the manufacturing sector, and suggesting Europe’s largest economy is gaining momentum following strong growth in the second quarter.
The Ifo think tank said on Tuesday its business climate index, based on a monthly survey of some 7,000 firms, rose to a better-than-forecast 107.5 in August, its fourth consecutive rise and the highest level since April 2012.
That was up from 106.2 in July and came in just below the highest estimate in the Reuters poll of 33 economists of 107.8.
“The German economy moved up a gear,” said Ifo economist Kai Carstensen. “Companies are more satisfied with their current business situation. Their optimism regarding future business developments – although slightly cautious – also grew.”
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