Germany's business confidence strengthened to a new record in November on optimistic expectations, suggesting another strong quarter for the economy.
The business climate index rose to 117.5 in November from a revised 116.8 in October, survey data published by the Ifo Institute showed Friday. The score was forecast to remain at October's initially estimated value of 116.7.
However, companies' assessment of the current business situation were no longer as positive as in October. The current situation index dropped to 124.4 from 124.8 a month ago.
The expectations index climbed to 111.0 in November from 109.2 in the previous month.
Ifo President Clemens Fuest said the German economy is on track for a boom. The latest figures indicate economic growth of 0.7 percent in the fourth quarter, pointing to growth of 2.3 percent for 2017 as a whole.
The largest euro area economy expanded at a faster pace of 0.8 percent in the third quarter on robust foreign demand and investment.
Fuelled by extremely low European Central Bank interest rates, the German economy will continue growing strongly, although it is likely that the grand coalition which is starting to emerge would further unwind the Agenda 2010 reforms, Joerg Kraemer, a Commerzbank analyst, said.
The survey showed that, in manufacturing, business confidence rose to a fresh record thanks to far more optimistic expectations. But, they scaled back assessments of their current business situation.
In wholesaling, the business climate index improved markedly as wholesalers were more satisfied with their current situation and expect businesses to pick up further over the next six months.
However, business climate in retail segment deteriorated in November. Retailers' assessments of their current business situation were far poorer but they expressed greater optimism about the next six months.
Likewise, business climate in construction decreased in November. Contractors scaled back assessments of both their current business situation and their expectations.
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