German business morale rose to the highest in almost two years

German business morale surged to the highest level in nearly two years in March, boosted by rising demand for manufactured goods from the factories which continue to increase production during new lockdown restrictions.

The Ifo institute’s climate index rose to 96.6 in March, the highest since June 2019, from 92.7 in February and strongly beat forecast for 93.2 rise.

Demand for German goods rose significantly in the industrial sector, where optimism was at its highest since late 2010, with initial signs of recovery seen in the service sector, which had been hit strongly by restrictive measures since November.

Positive data boost expectations that the economy remains relatively unhurt from the pandemic despite a slow vaccination and Chancellor Angela Merkel’s discontent handling of lockdowns that resulted in extension of strict measures until April 18, as Merkel was criticized for causing confusion by reversing a short-lived decision for an extend Easter holiday lockdown, seen as a circuit-breaker.