German Business Climate improves in December – Ifo

German business morale rose in December, following decline in past two months, signaling that European Union’s biggest economy regains traction despite new lockdown, imposed to contain a second wave of Covid-19 infections.

The Ifo institute said in its report for December that business climate index rose to 92.1 from upwardly revised November’s figure of 90.9, also beating forecast at 90.0, with improvement in manufacturing sector and export expectations, being main contributors.

German companies’ outlook for the first half of 2021 is brighter, as the lockdown is hitting some branches hard, but the whole economy is showing resilience and on track to avoid contraction in the fourth quarter.

Strong growth in industry and growing exports are expected to cushion negative impact of the latest tightening in lockdown measures and keep hopes for modest expansion in Q4.