German Companies More Optimistic Than Ever, Says DIHK Survey -- Update
10 February 2016 - 9:36PM
Dow Jones News
By Andrea Thomas
BERLIN--Business sentiment among German companies reached a
record high, according to a survey published Wednesday, reflecting
optimism about the domestic economy even as exports are expected to
slow sharply.
The German Chambers of Commerce, or DIHK, said its survey of
more than 27,000 local companies showed they were very upbeat about
their current business situation because strong private
consumption, low unemployment and higher wages gave a boost to
domestic trade and services sectors.
"Companies assess their current business situation as good as
never before," the DIHK report said. "Overall, low oil prices, the
weak exchange rate and favorable financing terms offer currently
unusually good conditions."
Martin Wansleben, DIHK managing director, said they were
"surprised by the optimism" companies displayed but risks ahead
stand in the way of a dynamic overall economic upswing.
The group maintained its growth outlook for 2016 of just 1.3%
that it already gave in the autumn.
"This is a solid performance, although not quite as dynamic as
the 1.7% in the year before," said Mr. Wansleben. "The multiple
international and national risks stand in the way of stronger
growth. We can also not expect that oil prices and the euro will
fall as much as in the past year."
The group's outlook is more pessimistic than the government's
forecast of 1.7% growth for 2016.
Of those polled between the beginning of December last year and
mid-January this year, 46% described their business situation as
good, up from 44% previously, while 46% said they were satisfied,
down from 47% in the spring. Only 8% said they weren't doing well,
compared with 9% previously.
The survey also showed that the companies' business outlook has
brightened, with 24% of them seeing improvements ahead, up from the
23% in the previous survey in the autumn.
About 13% of those surveyed said they thought Germany's economic
situation will worsen, down from 14% in the previous survey. The
percentage expecting the situation to remain the same remained at
63%.
The findings contrast with the latest survey of German business
sentiment conducted by the Ifo Institute, which reported a sharp
drop in business expectations based on a survey of 7,000 companies
due to weak a dynamic in developing economies.
DIHK said sentiment among German exporters improved somewhat
from last autumn's weakness due to a better economic outlook for
Europe and the U.S. as well as weak oil prices and the euro's low
exchange rate.
The number of respondents predicting that their export
activities would rise increased to 32% from 30%, while 56% said the
situation would remain unchanged. The proportion of those expecting
it to worsen fell to 12% compared with 14% previously.
The DIHK forecasts that German exports growth will slow to 3.0%
from 5.4% in 2015 due to global uncertainties and the fading boost
from the euro's weaker exchange rate. This is much below what the
DIHK calls a "normal" annual export growth level of 6%.
But the DIHK lobby group, which represents some three million
businesses, also warned that the unusually favorable conditions of
low oil prices, interest rates and the weak euro are up against
high political uncertainties, such as global conflicts and the
migrant crisis.
Mr. Wansleben stressed that the low oil price had been initially
positive, but the impact on the stability of oil producing
countries has become a concern.
Write to Andrea Thomas at Andrea.Thomas@wsj.com
(END) Dow Jones Newswires
February 10, 2016 05:21 ET (10:21 GMT)
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