Business confidence in Germany hit its highest level in nearly three years in November to post a seventh straight rise, a closely watched monthly survey revealed today.
The Ifo index, which polls executives at about 7,000 west German companies, rose to 95.7 from 94.3, as sections measuring current business conditions and expectations for the next six months each rose, the Munich-based Ifo institute said.
"The renewed improvement in the business climate index in west Germany indicates further progress in the economic recovery," Ifo head Mr Hans-Werner Sinn said. "The last time the Ifo business climate index rose so often in succession was in the economic recovery year of 1999."
Germany's economy has barely grown in three years, allowing unemployment to creep above 10 per cent .
Chancellor Mr Gerhard Schroeder is trying to push through cuts in Germany's generous welfare state, a shake-up of its tightly regulated job market and accelerated tax cuts to stimulate growth.
The government is banking on an economic recovery next year to create badly needed jobs and help it pull public spending back into line with European Union budget rules supposed to protect the value of the euro.
Mr Sinn said business confidence increased in the manufacturing and construction industries. In retailing the index's rise was broken, which could indicate consumer uncertainty about whether parliament will pass planned tax cuts, he said.
The German economy slowly emerged from recession in the third quarter, expanding 0.2 per cent from the second quarter after contracting 0.2 per cent in both preceding quarters. For the year as a whole, the German economy is forecast to stagnate or shrink very slightly.