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German businesses brush off Brexit

Reuters / Khmer Times Share:
A file photo shows a Siemens employee working on a steam turbine rotor. Wikimedia/Christian Kuhna CC BY SA

BERLIN (Reuters) – A euphoric mood among German constructors and manufacturers drove business confidence to an all-time high in October, a survey showed, reflecting optimism that an upswing in Europe’s largest economy has further to run.

The Munich-based Ifo economic institute said yesterday its business climate index, based on a monthly survey of some 7,000 firms, rose to 116.7 from an upwardly revised 115.3 in September.

Ifo said a continuing recovery in the euro zone was helping German exporters feel more positive. This was especially true for capital goods manufacturers and mechanical engineering firms.

“Companies are very optimistic about the months ahead. They also upwardly revised their very favourable assessments of the current business situation,” Ifo chief Clemens Fuest said in a statement. “Germany’s economy is powering ahead.”

Ifo economist Klaus Wohlrabe said the economy was unfazed by complex coalition talks that Chancellor Angela Merkel has embarked on with two other parties after her conservative bloc lost ground in a national election last month.

The record high reading, which came after two consecutive monthly falls, beat a Reuters consensus forecast of 115.2.

Mr Wohlrabe added that companies also appeared to be taking in their stride Britain’s scheduled departure from the European Union, a standoff between the Spanish government and the region of Catalonia and US tax reforms.

If the Ifo indicator rose again in November, a change in the growth forecast for Europe’s largest economy could be needed, Mr Wohlrabe said.

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