German business ends 2014 on a positive note

The Munich-based Ifo economic institute said Thursday that its monthly business confidence index jumped from 104.7 points in November to 105.5 this month.

The think tank calculates its headline index on the basis of companies' assessments of current business and the outlook for the next six months. And based on a monthly survey of about 7,000 companies, Ifo said managers' outlook for the coming six months had improved while their assessment of the current situation was unchanged.

While the gauge measuring expectations climbed to a higher-than-forecast 101.1 points in December, the index measuring industry's assessment of current business conditions fell short of analysts' projections.

"The outlook for the months ahead continued to brighten," Ifo chief Hans-Werner Sinn said in a statement.

It comes after Germany narrowly escaped falling into a recession in the third quarter after the country's economy expanded by a mere 0.1 percent. But a weaker euro, lower oil prices, as well as hopes that global tensions might be easing have all contributed to a rebound in sentiment since then.

The survey "heralds the end of the economic rough patch," Christian Schulz of Berenberg Bank was quoted by news agency AFP as saying. "Resilient export expectations, a strong competitive position, receding uncertainty over Russia's action in Ukraine and cheap oil boost the outlook for Germany's industrial backbone," he underlined.

Recent data have shown a promising increase in German factory orders. Furthermore, the European Central Bank (ECB) has also signaled plans to unveil a new set of stimulus measures in 2015, which could help keep the eurozone nations on an economic growth path.

Earlier this week, another survey of German investor confidence - released by the Mannheim-based ZEW institute - rose sharply to touch its highest level since May.

sri/uhe (dpa, AFP, AP)