24 September 2009 at 10:41 GMT
IFO surveys released today show more positive sentiment and expectations about the economic future in Germany.
As expected, the IFO surveys followed the ZEW surveys released nine days ago.
Expectations for both were a bit too optimistic, leaving the actual figures above prior readings but still short of consensus.
The business climate outlook came out at 91.3 (vs. expected 92), indicating the most positive attitude for the upcoming fourth quarter since October last year. This is after having hit a 26-year low of 82.2 only six months ago. The current assessment rose by 0.9 to 87 and executives' expectations rose to 95.7 from a prior reading of 95.
During the month the manufacturing business climate indicator has recovered somewhat. However, more firms are now planning to reduce the number of their employees. For wholesaling and retailing the business climate improved and both sectors are less critical regarding the developments in the coming half year. In construction, the present and anticipated business climate is similar to the assessment from August.
Like the US, Germany has pulled forward demand by introducing a similar cash-for-clunkers program which offers €2500 for scrapping an old car, combined with infrastructure investments and tax rebates when trying to kick-start the German economy. Angela Merkel has approved a $126bn programme for funding activities such as the ones mentioned above.
Expectations for this Sunday’s election for the federal parliament of Germany are that there will be no major changes as Merkel leads opinion polls as of now.